Australia's biggest bank has announced further support measures for those experiencing financial hardship as a result of the economic fallout from COVID-19. 

After liasing with the Government, most banks offered a six month deferral on home loan repayments if borrowers required it. 

However, the loan still incurred interest in this time, which could extend the length of your loan and cost you in the long run. 

Commonwealth Bank (CBA) Group Executive Retail Banking Services, Angus Sullivan, said the bank recognised this, and was commited to supporting Australian households through the crisis. 

“When a home loan repayment is deferred for six months, interest is calculated and added to the loan balance each month which can result in customers paying interest on interest each month," Mr Sullivan said. 

“To support more Australians, we will make a one-time payment to all customers who are receiving a home loan deferral because of the coronavirus."

Mr Sullivan said on an average loan of $350,000, CBA would be refunding approximately $45 to offset the effect of interest on interest over the six month period. 

"Customer payments will vary based on their loan amount and interest rate," he said. 

For reference, if you were a CBA customer and deferred your home loan for six months after borrowing five years ago, assuming you had CBA's standard variable rate of 3.08% p.a and a loan amount of $350,000 repaid over 25 years, your monthly repayments prior to the deferral would be $1,675.

After the six months, your monthly repayments would be $1,724, a difference of $49. 

Looking for an owner-occupier home loan? The table below displays a selection of variable home loans with some of the lowest interest rates on the market.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
Featured 4.6 Star Customer Ratings
  • No monthly or ongoing fees
  • Unlimited free redraw
  • No application fee
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

In addition to support for home loan customers, CBA announced support measures for credit card customers who were unable to make their minimum credit card repayment on time in March. 

Any customer that missed their credit card minimum repayment in March, would automatically be refunded their late fees and interest for the month of March. 

“This support is focused on customers who are finding it difficult to meet their current commitments before further Government stimulus arrives in April and May,” said Mr Sullivan.

CBA had previously announced support measures on 20 March that included: 

  • Offering existing and new home loan customers the ability to defer loan repayments for six months;
  • 70 basis point interest rate reduction for home loans with one, two and three year fixed terms to 2.29%, available to both new and existing owner-occupiers on principal and interest repayments with a Wealth Package;
  • 60 basis point interest rate increase on 12-month term deposits for personal customers to 1.70% p.a;
  • Changes to minimum home loan repayments. 

What support measures are other lenders offering? 

The Australian Banking Association (ABA) announced in March all small businesses impacted by the unfolding coronavirus crisis will be able to access a six-month deferral of loan repayments to ease some of the pressure.

ABA CEO Anna Bligh said the package will apply to more than $100 billion of existing small business loans and could put as much as $8 billion back into the pockets of small businesses.

“This is a multi billion dollar lifeline for small businesses when they need it most, to help keep the doors open and keep people in jobs," Ms Bligh said.

NAB and ANZ then extended this offer to homeowners for six months, while ANZ did the same for three months. 

NAB also announced reductions of up to 60 basis points to fixed rate home loans. 

“These measures will provide significant relief to businesses and homebuyers over the next six months as we all deal with this unprecedented situation," said NAB CEO Ross McEwan.





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