Customers with mortgage deferrals fear they won’t be able to start paying their loans again

Stressed mortgage customers who have deferred their loans fear they won’t be able to start meeting their repayments again.

Stressed mortgage customers who paused their loans fear they won’t be able to start meeting their repayments again, new analysis shows.

Most mortgage repayment holidays are due to end next month, at the same time the Federal Government’s JobKeeper program ends.

But new figures from financial services firm Mozo show about one in three mortgage customers who are receiving JobKeeper payments say the government payments are keeping them afloat.

Latest banking data reveals about 60,600 mortgages, 11,300 business loans and 6900 unsecured loans are on hold with the big four banks. 

But the Mozo analysis based on a survey of 1300 Australians found:

• 24 per cent of customers with paused loans don’t believe they can meet their repayments soon

• 38 per cent are considering switching to interest-only loans

• 30 per cent will struggle but will start repaying their loans

Mozo spokeswoman Kirsty Lamont urged borrowers on repayment holidays to get in touch with lenders as soon as possible if they are concerned about being able to start paying again.

Financial comparison website Mozo spokeswoman Kirsty Lamont said there’s tough times ahead for many mortgage customers.

“We could be on the verge of some incredibly tough times for a lot of Australians as JobKeeper ends and people start coming off mortgage repayment holidays,” Ms Lamont said.

“It’s really important you are proactive and talk to your bank about your situation. The banks will have thousands of customers in this situation.”

Ms Lamont said banks would be determined to avoid customers having to sell their homes because they are unable to meet their repayments.

Many customers who requested a payment deferral were automatically given up to six months’ reprieve and for some this was extended by another four months.

Australian Banking Association chief executive officer Anna Bligh conceded some borrowers with deferred payments are battling financially.

“While the vast majority of deferred loans have resumed repayments, there’s no doubt that some people are still struggling,” she said.

“Banks are working with their customers to ensure they don’t fall off a cliff at the end of March.”

Ms Bligh urged customers to contact their financial institution soon for further assistance with their loans.

“The best thing people can do is call their bank,” she said. “The sooner they get in touch, the sooner the bank can help.”

Options available to customers including extending their loan term, switching to interest-only payments or negotiating a better interest rate.

@sophieelsworth