Too big to fail: CommBank suspends foreclosures until September 2021

author-avatar By on November 03, 2020
Too big to fail: CommBank suspends foreclosures until September 2021

Photo by Pawan Kawan on Unsplash

Commonwealth Bank is the first major bank that has introduced a moratorium on forced home sales until September 2021.

The moratorium applies to customers who were up to date with their mortgage payments before COVID-19 hit.

The move comes after Financial Counselling Australia chief Fiona Guthrie pushed in September for lenders to avoid forced home sales for borrowers who were affected by the pandemic.

As of October, CommBank had the largest share of 90%+ LVR loans deferred out of the 20 largest banks, at nearly 13.5%.

However, it had reduced the number of overall deferrals on its books by approximately 100,000, down from 210,000 ($67 billion) in June to 129,000 ($42 billion) in September.

CommBank's financial year 2020 results indicated as of August it had access to $31.4 billion in the Reserve Bank's term funding facility.

More to come...

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.

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. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.


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 2020. 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 2020) 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, Performance Drive 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Harrison joined Savings in 2020. He is an experienced journalist, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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