Coronavirus sees $7 billion worth of loan repayments deferred

author-avatar By 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.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
2.68% 2.74% $1,618 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 01 June 2020. 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$1.3 billion in super withdrawn 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 which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

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.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*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.

Latest Articles

author-avatar
Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

Collections:

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}

Advertised Rate

{{returnData.advertisedInterestRate}}

Comparison Rate*

{{returnData.comparisonRate}}

Monthly Repayment

{{returnData.monthlyRepayment}}

Interest Type

{{returnData.interestType}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Bonus Interest Rate

{{returnData.bonusInterestRate | percentage:2}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Introductory Rate

{{returnData.introductoryRate | percentage:2}}

Introductory Term

{{returnData.introductoryTerm}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Term

{{returnData.term}}

Advertised Interest Rate

{{returnData.advertisedInterestRate | percentage:2}}

Interest Frequency

{{returnData.interestFrequency}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ratio (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments

Maximum Loan Term

{{returnData.maximumLoanTerm}}

Upfront Fee

${{returnData.upfrontFee}}

Ongoing Monthly Fee

{{returnData.ongoingFees}}

Early Repayment Fee Applies

N/A

Vehicle Types

{{returnData.vehicleType}}

Maximum Vehicle Age

{{returnData.maximumVehicleAge}}

Pre Approval Available

N/A

Online Application

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Minimum Deposit

{{returnData.minDeposit | currency : '$' : 0}}

Upfront Fees

{{returnData.upfrontFee | currency : '$' : 0}}

Annual Fees

{{returnData.annualFee | currency : '$' : 0}}

Notice Period to Withdraw

{{returnData.noticePeriodToWithdraw}}

Online Application

N/A

Automatic Rollover

N/A

Maturity Alert

N/A