Tens of thousands of mortgage customers still unable to meet their loan repayments

Mortgage repayment holidays might be coming to an end, but there is still help available for those who are cash-strapped.

One in eight mortgage customers who deferred their payments because of the impact of COVID-19 are still unable to meet their repayments – but can get further help.

For some customers this may include extensions to their deferral period, lower repayments, interest-only terms or a lower interest rate.

During the pandemic about one million loans – both mortgages and business loans – were put on hold, but now just 60,600 mortgages, 11,300 business loans and 6900 unsecured loans are on hold with the big four banks.

But some customers are still seeking loan deferrals, with more than 650 customers approved in January to delay repayment holidays.

The Australian Banking Association’s chief executive officer Anna Bligh said help will still be on offer to customers who need it by speaking to their lender’s hardship team.

“Anyone who is worried about their financial circumstances should be talking to their bank as soon as possible,” Ms Bligh said.

“Banks have supported customers going into COVID and they are determined to support them on the way out. Every customer is different and the solutions for everyone will be different.”

Australian Banking Association CEO Anna Bligh said further help is available to customers who are still unable to meet their loan repayments.

During the pandemic, there were fears many borrowers would run into severe financial trouble when mortgage deferrals finished, but Ms Bligh said this will now be avoided.

“There’s not going to be thousands of people falling off a cliff on March 31,” she said.

“Those who are still in trouble on the 31st of March will be assessed by a hardship team.”

A new online financial assistance hub has been set up by the ABA to help customers get all the information they need.

But from April, banks will have to start reporting customers in hardship arrangements to credit reporting agencies and this will stay on a customer’s credit file for 12 months.

Customers who sought help last year were given a six-month pause on their loan.

Repayment holidays for most struggling customers were automatically given by just phoning up their lender or sending them an email.

The Financial Counselling Australia’s chief executive officer Fiona Guthrie urged customers to talk to their banks sooner rather than later if they still need help.

“If you don’t get the help you need, or you are overwhelmed, then come and talk to a financial counsellor,” she said.

“The earlier you talk to your bank or creditor the better … explain what your situation is and start putting in plans, you will have more options that way.”

She said creditors want to “meet with customers halfway” to come up with a payment solution.

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@sophieelsworth