Banks have a range of options to help customers
14 October 2020
New Australian Banking Association data reveals that almost half of deferred loans are now being repaid again as Australians recover from the pandemic.
In late June the number of loans which had been deferred by Australian homeowners and businesses peaked, with around 500,000 mortgages, and more than 200,000 small business loans, having paused repayments.
Based on data collected by the ABA from seven of Australia’s largest banks, as of last week, the number of deferred mortgages had dropped to 270,000, meaning repayments had resumed on at least 224,000 loans. Almost half (45%) of deferred mortgages are back to making regular loan repayments.
“This is a good sign for the economy. It shows that more Australians are getting back on their feet and resuming their loan repayments”, said Australian Banking Association Chief Executive, Anna Bligh.
Australian banks provided a loan repayment deferral to around 1 in 11 Australian mortgage holders and 1 in 8 small business owners so they had some breathing space during the worst of the COVID-19 pandemic.
“This a good sign for the economy. It shows that more Australians are getting back on their feet and resuming their loan repayments”ABA CEO Anna Bligh
“These loan deferrals have helped hundreds of thousands of Australian families and small businesses survive the pandemic”, Ms Bligh said.
Repayments have also resumed on at least 82,000 small and medium business loans. This means two in five (41%) small and medium business loans that had been deferred are now being repaid again.
In just the past month, as many customers came to the end of their 6-month deferral, more than 130,000 mortgages and 50,000 SME loans had had their repayments resumed.
According to the data from Australia’s seven largest banks, the total number of deferred loans has dropped to 439,000.
“Right now, it’s really important that people contact their bank to figure out the path ahead. The earlier you speak to your bank, the more options they have to help you find a way through”, Ms Bligh said.
“Banks will work with customers to figure out a tailor-made solution. That might include restructuring a loan, or in some cases, granting an additional four month deferral.”
“If you are in financial difficulty, please call your bank, they can help you find a way through. Don’t tough it out on your own.”
“Since the Banking Code was first introduced in 1993, the process to independently review the Code has continued to deliver improvements.”
“A number of our banks actually have maternity leave lending products that are specific to people on parental leave, paid and unpaid, to help them through, what as I said, can be a difficult time.”