Banks have started contacting customers who have taken out mortgage deferrals
Cash-strapped borrowers who have taken out a mortgage deferral have started to receive calls from their bank asking them if they can begin repaying again.
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Cash-strapped borrowers who have taken out a mortgage deferral have started to receive calls from their bank asking them if they can begin repaying again.
Latest figures from the big four banks show collectively 429,000 customers have requested a breather of up to six months on their loans.
Hairdresser Sheree Daniels, 41, from the Gold Coast, was juggling multiple jobs but lost all her income when the pandemic struck, making it impossible to meet her $300 weekly loan repayments.
It forced her to take a repayment holiday on the $171,000 mortgage on her two-bedroom unit with the Commonwealth Bank and also access JobSeeker payments.
“It was stressful at the time because I didn’t know how long I would be out of work for,” Ms Daniels said.
“I’ve been really watching my bills as I’ve still got to pay body corporate, water and rates so the JobSeeker money has helped.
“As soon as I can get back on my feet I would like to start repaying my loan again and I’m also paying my $600 mortgage interest bill on my loan each month so I don’t have that added on at the end.”
During mortgage holidays, repayments are paused but the interest charges still accrue and are added onto the loan once the period ends.
Some banks are allowing customers to extend their mortgage term once the holiday ends, to reduce the impact of higher repayments once they start paying again.
Mortgage Choice broker James Hasselle said many borrowers would be weighing up if they needed a “second spell of deferral”.
“They need to look at their budget,” he said.
“Have they changed their work arrangements and got hours back up and JobKeeper kicking in?
“It’s important because some people have used the deferral when they didn’t need to.”
Mr Hasselle suggested borrowers check their interest rate and make sure they were getting a good deal.
ANZ figures show about 20 per cent of its customers who requested a home loan deferral didn’t end up following through.
ANZ head of home loans John Campbell said in the coming weeks – and three months before payment deferrals ended – it would be contacting customers.
“We will be asking customers if they are getting back on track with their finances and if they are comfortable to start repayments again at the end of the six month payment deferral period,” he said.
“We will also remind customers that they continue to have the option of making additional payments during the deferral period if they want.”
BIG BANK MORTGAGE DEFERRALS
ANZ
• More than 105,000 deferrals.
• Six-month deferrals.
• They will start contacting customers in mid-June after three months.
Commonwealth Bank
• More than 144,000 deferrals.
• Six month deferrals.
• Contact customers at the three-month mark.
National Australia Bank
• More than 80,000 deferrals.
• Two to six-month deferrals.
• Already started checking in with customers.
Westpac
• More than 100,000 deferrals.
• Three-month deferrals, with another three months available on review.
• Already started contacting customers.
Originally published as Banks have started contacting customers who have taken out mortgage deferrals