Mortgage lifeline for struggling Aussies
Australians hit hard by coronavirus could be eligible for a further four-month extension on their mortgage payments.
A six-month deferral scheme for those struggling financially because of coronavirus came into place in March, and more than 800,000 Australians have taken up the offer.
But as the end of the scheme rapidly approaches, banks are looking for customers to resume payments as soon as possible.
But anyone still struggling to pay their mortgage could be offered an extension to the length of their loan to convert their repayments to interest only for a period of time or to consolidate their debt.
Those who need more time will be eligible for a further four months of payment deferrals, though Australian Banking Association CEO Anna Bligh believes many customers will only need a fraction of that time to either restructure their loans or return to full payments.
"This next phase of bank support will avoid a 'cliff' for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially" Ms Bligh said.
"Australia's banks supported their customers as the country entered the COVID-19 crisis, and they are determined to support their customers on the way out of the crisis."
The extra four months will not be automatic, and customers will need to apply for the extended grace period, while those who can begin to repay their loans must do so.
The additional help is intended to help protect Australia's economy from the "economic cliff" it faces at the end of September when JobSeeker payments and the JobKeeper program are expected to end.are expected to end.
Commonwealth Bank chief executive officer Matt Comyn said the institution had provided about $15 billion in direct financial support to customers and stimulus to the economy.
"While many customers are doing better than we expected, we know that some customers will require further support, and we will contact them over the coming months to discuss the options that might be available to them," he said.
"Supporting customers who continue to experience financial difficulty is a priority, and we are tailoring our support to make sure each customer gets the advice and assistance that suits them."
NAB said it would also offer the extended loan period, ending no later than March 31, 2021.
"While a significant portion of businesses and homeowners that we have spoken to have started their repayments again, there are clearly still many customers who may need support for a bit longer," CEO Ross McEwan said.
"Bankers will speak with customers about their individual circumstances and the options appropriate for them which may include loan restructure, determining alternative fund sources, hardship assistance or further deferral for up to four months."
Originally published as Mortgage lifeline for struggling Aussies