As the Government is willing to ‘do what it takes’ to support Australians’ with loan repayments, the 4 big banks are doing their part as well. Business Advisor, Sam Crugnale explains what the big banks are doing to help their borrowers hit by COVID-19.
As the COVID-19 pandemic takes its toll, it’s quite likely that people with loans will struggle to make home loan payments. The Government has promised to “do what it takes to get Australians over the financial bridge”.
In response, mortgage lenders have been quick to announce specific hardship support policies to help borrowers. Whilst there are differences in support being offered between lenders, for the most part, lenders are allowing borrowers to defer their repayments.
Heres how the big four are helping borrowers hit by COVID-19:
- COMMONWEALTH BANK is offering repayment deferral for “all home loan customers” for up to six months. Please note, the bank will charge interest and charges during this pause in repayments. You will need to repay those interest charges plus the deferred repayments.
More information on the Commonwealth Bank website
- NAB Customers with home loans can pause repayments for up to six months. But over the remaining loan term, you will need to increase your repayments to fully repay the loan amount. You can organise repayment changes using the NAB app. NAB has also lowered fixed home loan rates for new customers.
More information on the NAB website
- WESTPAC loan customers who have lost their job or substantial income because of COVID-19 can apply for a three-month repayment pause followed by a second three-month pause (subject to review). Lower fixed rate owner-occupier loans are available for new borrowers too.
More information on the Westpac website
- ANZ BANK is cutting its variable home loan rate by 0.15% (effective 27 March). This will make repayments cheaper for borrowers with variable loans. Borrowers can pause repayments for six months, with a review three months in. Interest will be charged during this period and added on to the loan balance, meaning you will have to repay it later.
More information on the ANZ Bank website
While we’re unable to list every lender and their policy, the list below contains a significant number of Australian lenders outside the Big Four:
- ST. GEORGE BANK OF MELBOURNE AND BANKSA: These lenders are part of the Westpac group and have announced similar coronavirus support packages, including up to six months of repayment relief and lower fixed rates for new customers.
More information on the St George website
- BENDIGO AND ADELAIDE BANK borrowers can now apply for up to six months of loan relief. The bank is also waiving fees normally charged on debt consolidation and loan restructuring.
More information on the Bendigo & Adelaide Bank website
- MACQUARIE BANK from 20 March all Macquarie loan customers (including home, car and personal) can “immediately defer their repayments” for six months. You can change your repayment structure via the Macquarie Banking app or call its mortgage support line on 1300 363 330.
More information on the Macquarie Bank website
Don’t be fooled!
This may sound like a free ride for 3 to 6 months, but do not be fooled! You will still have to pay the loan amount, over the remaining loan term, unless you negotiate with your bank to extend your loan term after the pause period. As some lenders may charge interest still on months of non-payment, with that being capitalised into your loan.