Banks have begun to contact customers for their six-month assessment of their home loan deferral to discuss the next stage of support and assistance, as the initial six-month wave comes to an end.
With over 900,000 loans deferred during the COVID-19 pandemic, at least 450,000 would be assessed in the coming weeks, including 105,000 business loan deferrals.
The next steps presented to customers would include:
- Those who could resume repayments at the end of their deferral would be required to do so;
- Those still in difficulty would work with their bank to restructure or vary their loan, including converting to interest only payments for a period of time or extending the term of the loan;
- Following the assessment once the bank understands the customers circumstances, a further four-month deferral may be granted, but this would not be automatic; and
- Customers who would be unable to pay their loan over the longer-term would be offered tailored assistance that addressed their needs.
Of the 900,000 deferred loans, 13% had already resumed payments by the end of July, with banks estimating another 100,000 had resumed during August.
Anna Bligh, Australian Banking Association (ABA) chief executive, said the loan deferral measure had led to the largest-ever customer contact process in the industry, which required 5,000 new or redeployed staff.
“Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs,” Bligh said.
