If COVID-19 has impacted your income to the point where you may need to pause your mortgage repayments, here’s some info on the banks’ loan repayment deferral policies.
Late last week the Australian Banking Association (ABA) announced that small businesses affected by the coronavirus could have their loan repayments deferred for six months.
Following that announcement, the major banks announced support measures that would apply to home loan customers.
Below we’ve outlined deferral policies announced by some of the lenders.
Commonwealth Bank
All CBA home loan customers are now eligible to defer loan repayments by up to six months. A digital registration process is available for any home loan customer wishing to defer their repayments.
Here’s a full statement on the support CBA is providing for personal customers.
Westpac
“Westpac customers who have lost their job or suffered loss of income as a result of COVID-19 should contact us for three months deferral on their home loan mortgage repayments, with extension for a further three months available after review,” the bank said in a statement.
Here’s the statement and support package details in full.
NAB
Home loan customers experiencing financial challenges will be able to pause their repayments for up to six months, with NAB checking in after three months.
For a customer with a typical home loan of $400,000, this will mean access to an additional $11,006 over six months, or $1,834 per month, NAB says.
Check out their statement for more details on their support package.
ANZ
If you’re experiencing financial difficulty due to COVID-19, ANZ may be able to support you by putting your home loan repayments on hold for six months, with interest capitalised (see below).
If you pause your repayments, ANZ will check in with you after three months.
ANZ have also released a statement detailing their full customer support package.
St George
St George are offering repayment relief for home loan borrowers. Borrowers who have lost their job or suffered loss of income as a result of COVID-19 should contact their lender for three months deferral on home loan mortgage repayments with extension for a further three months available after review.
You can find their statement here.
Macquarie
Macquarie are also offering repayment relief. All borrowers experiencing financial difficulty can immediately defer their repayments for six months.
For more information, you can find their statement here.
ME
All borrowers who are experiencing financial difficulty have the option to pause home loan repayments for up to six months, with a review at three months.
BankWest
BankWest have announced that loan repayments can be deferred for six months on home loans held by small business customers those in need of support. There doesn’t seem to be any mention of home loan borrowers. You can check the details here.
Other lenders
This is obviously not an exhaustive list of how each lender plans to offer borrowers support over this time. Whilst we have read news reports of other lenders offering support measures too, since we’ve not received official communication from the lender directly or been able to verify the details of these measure on lender specific websites, we have not included them in this post.
An important final note
It’s also important to note that policies outlined above only state lenders will allow you to defer your repayments – not stop interest from accruing on your home loan. That essentially means your home loan amount will continue to grow while repayments are on pause, as any unpaid interest will be added to your outstanding loan balance. In some cases, your loan term may also be extended.
Hitting the ‘pause’ on your home loan is not the only thing you can do to help with monthly cashflow.
Please reach out to have a chat if you’re feeling anxious about your personal situation. We’re here to help.
