Mortgage holiday over for almost half a million borrowers

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on September 07, 2020
Mortgage holiday over for almost half a million borrowers

Source: Twitter

Lenders have begun to contact borrowers who have deferred mortgage repayments to see whether they can restart payments.

The six-month mortgage holiday offer that almost 500,000 Australians took up has come to an end, and banks are now discussing with customers what the next stage of support and assistance may look like. 

More than 900,000 loans have been deferred since the start of the pandemic, and at least half of that number will be assessed in the coming weeks. 

Of the loans deferred, 262,000 are home loans, of which 80,000 will be assessed by the end of September, and 180,000 by the end of October. 

Over 105,000 business loans to small and medium businesses have deferred loan repayments, and 65,000 of these will be assessed by the end of September, and 40,000 by the end of October. 

Looking to compare low-rate, variable home loans? Below are a handful of low-rate loans in the market.

Lender

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
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
NO ONGOING FEES
  • 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
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • 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

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 20, 2022. View disclaimer.

Australian Banking Association (ABA) chief executive Anna Bligh said the operation to assist customers experiencing financial hardship was massive but vital. 

“The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5000 new or redeployed staff working to ensure customers understand their options," Ms Bligh said.

“Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs.”

For borrowers who have deferred loan repayments, lenders will outline the following steps: 

  • Those who can resume repayments at the end of their deferral will be required to do so;
  • Those still in difficulty, will work with their bank to restructure or vary their loan, including converting to interest-only payments for a period of time, or extending the term of the loan;
  • Following the assessment, once the bank understands the customers' circumstances, in some cases, a further 4-month deferral may be granted, but this will not be automatic; and
  • Customers who will be unable to pay their loan over the longer term will be offered tailored assistance that addresses their needs 

Of the 900,000 deferred loans, 13% had resumed repayments by the end of July, with lenders estimating an additional 100,000 borrowers had resumed repayments in August. 

"As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it.” Mr Bligh said. 

ANZ launches free home loan check-in

ANZ has launched a free 15 minute home loan check-in to review how much borrowers' repayments are, their frequency, how long it will take to pay off the loan and how much equity there is. 

ANZ Home Loans General Manager John Campbell said the scheme encourages borrowers to be proactive in managing their home loan. 

“Home loans are one of the largest financial commitments households will make in their lifetime and it should not be a ‘set and forget’," Mr Campbell said.

"With so much change and uncertainty at the moment, what was best for you when you first took out the loan may no longer suit your current needs."

The check-in is open to everyone, doesn't require any paperwork or preparation, and can be done over the phone or in-branch. 

ANZ Home Loan Check-In Ambassador Angela Sibley said the check-in helped to manage her family's finances after her husband lost her job. 

"When we did the Check-In, it was a great personalised conversation. The fact that you can talk to a real person is very reassuring, especially during uncertain times," Ms Sibley said.

"We asked questions and they answered them openly and reaffirmed our decisions.

"If anything, it’s just stressed how important ongoing management of your home loan actually is."




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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