Coronavirus sees $7 billion worth of loan repayments deferred

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on May 04, 2020
Coronavirus sees $7 billion worth of loan repayments deferred

Photo by Shi Min Teh on Unsplash

Australians experiencing financial hardship due to COVID-19 have deferred $6.8 billion business, mortgage and other loan repayments.

That's according to data released by the Australian Banking Association (ABA) which showed more than 320,000 homeowners have been approved for a loan deferral on their mortgage repayments. 

An additional 170,000 business owners have also received a deferral on their business loan repayments and nearly 37,000 other loan repayments, such as personal loans and credit cards, have also been deferred. 

Meanwhile, cheap loan facilities to assist small and medium-sized businesses have seen more than $45 billion in new loans and a further $6 billion has been loaned through increases to existing loans and credit facilities. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWS
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWS

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
  • Low rate home loan with added benefits, add offset for 0.10%
  • Save thousands & make an environmentally conscious choice on your loan for homes less than 12 months old
  • Get a 7.0 star NatHERS rating or higher for up to 1.59% discount on your variable rate home loan T&Cs apply

Green Home Loan (Principal and Interest)

  • Low rate home loan with added benefits, add offset for 0.10%
  • Save thousands & make an environmentally conscious choice on your loan for homes less than 12 months old
  • Get a 7.0 star NatHERS rating or higher for up to 1.59% discount on your variable rate home loan T&Cs apply

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 7, 2022. View disclaimer.

ABA CEO Anna Bligh said the decision by banks to defer payments would take some of the pressure off Australians who are doing it tough.

“The actions of banks will help inject much needed investment into the economy, with the deferrals, new lending and increased credit, allowing people and businesses to spend on the things they need," Ms Bligh said.

“The strength of Australia’s banks has allowed the industry to step up and play a key role in helping, not only our customers, but supporting the recovery of the Australian economy, through one of the most challenging periods in our lifetimes.”

$1.3 billion in super withdrawn 

The Australian Prudential Regulation Authority (APRA) has published data regarding withdrawn superannuation due to the financial hardship from COVID-19.

The regulator found there were over 650,000 applications for early release, with more than 150,000 processed, paying members a total of $1.3 billion, with an average benefit paid of $8,002

For applications paid in the first week of the scheme, trustees took an average of 1.6 days to make payments to eligible members after receipt of their applications from the ATO. 

APRA Deputy Chair Helen Rowell said the statistics ensured compliance and provided valuable insight into members' behaviour. 

"This new data collection enables APRA, Government and other stakeholders to monitor the take-up of the new scheme, and ensure trustees are processing eligible applications in a timely manner," Ms Rowell said. 

"Under the Superannuation Industry (Supervision) Act 1993, trustees are legally required to make early release payments to eligible members ‘as soon as practicable’.

"We expect trustees should generally be able to achieve this within five business days, however we recognise this may not be practicable in all cases, as trustees conduct fraud checks, and fulfil their legal obligation to look out for the best interests of all fund members.

“APRA is closely monitoring trustee performance in this area and will consider taking appropriate action if evidence emerges of funds not releasing benefits to eligible members as soon as practicable." 
 




Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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