Assistance for Mortgage Holders From the Big Four
21 April 2020
Times are tough for many homeowners, investors and businesses as the COVID-19 crisis continues to hit the hip pockets of many Australians. In the midst of all this upheaval, many families are now struggling to manage their home loan repayments. This has prompted the Big Four to give mortgage holders a helping hand.
Commbank, ANZ, NAB and Westpac are freezing mortgage repayments for eligible customers for up to 6 months. However, it is important to note, that interest will continue to accrue in most cases.
Here is what each of the major financial institutions is offering customers in response to the coronavirus fall out.
ANZ customers have the option to apply for COVID-19 (hardship) assistance. In part this allows customers to defer home repayment for 6 months, with the bank checking in after 3 months to see if further assistance is required.
If this is the case, unpaid interest during the period is capitalised, meaning it’s added to the customer’s outstanding loan balance to be paid over the remaining loan term.
ANZ’s COVID-19 support package also includes three measures for home loan customers impacted by the crisis:
- A 0.15%pa decrease on variable interest home loan rates in Australia
- The introduction of a two-year fixed rate of 2.19%pa for owner-occupiers paying principal and interest
- Request for deferral of home loan repayments for up to six months and a review after three months.
Customers who are ahead in their home loan repayments may have the option to access their existing redraw balances or use funds in their offset of deposit accounts.
2. Commonwealth Bank
Australia’s largest home lender has announced further support for home loan customers impacted by coronavirus.
Customers requesting financial assistance during this time will be able to defer their payments for six months, with interest added to their home loan.
Other relief measures include:
- A one-off payment to offset interest on interest costs during the six month deferral period. The payment amount is dependant on the loan balance.
- Loan terms will be extended so customer repayments do not increase as a result of the deferral period
- Options to access redraw facilities for eligible loans, reduce repayments or transition to interest-only payments during the period
- Reduced rate of 2.29% pa (3.99% p.a. comparison rate) for new one, two and three-year fixed-rate home loans for owner-occupiers paying principal and interest
- From 1 May, eligible customers paying by direct debit will automatically have their investment/home loan repayments reduced to the minimum. Those wanting to continue higher repayments should contact the bank.
Again, struggling owner-occupiers and investors will be eligible for a six-month mortgage deferral. NAB’s support measures also include:
- Access to redraw facilities for customers ahead of their home loan repayments, or with savings in an offset account. Eligibility and balances can be checked through NAB online or app banking
- Reducing repayment amounts during the period
- Request for financial hardship assistance on personal loan repayments.
Under Westpac’s COVID-19 Customer Support Package, home loan customers will be able to apply for a repayment deferral for an initial three-month period, and a possible three-month extension after review.
The bank has also made a $10 billion home lending commitment, doing its part to keep the property market and economy moving. Westpac is also offering new-low fixed mortgage rates for one, two or three years for owner-occupier customers paying principal and interest.