Another 100,000 Aussies deferred loans this week alone

The number of loans being deferred continues to roll on with a total of more than $200 billion now pushed back.

The government is beginning to ease social distancing measures but the cost of mass job losses during the coronavirus pandemic continues to weigh on Australian families with another 100,000 deferring their loans this week alone.

More than $200 billion has now been deferred by the lenders from at least 643,000 loans, according to new data released by the Australian Banking Association.

The period of grace offered by the banks is due to expire in September but the association’s chief executive Anna Bligh expects a number of Australians won’t be able to return to affording their mortgages by this time.

Nearly 400,000 of the total loans deferred relate to homes, illustrating the destructive cost of the pandemic as the employment rate is expected to soar to about 10 per cent by June.

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“We would fully expect many Australians will be in a position to go back to repaying their loans but it is equally clear that there are going to be some sectors of the economy hit much harder than others,” Ms Bligh said.

“Many customers will be seeking to either extend those deferrals or to come to an arrangement with their bank where they might be paying interest only or a lower amount.

“Banks are right now working through those options, working with regulators so they understand what is possible, because we want customers to know at the end of this six months if they can’t go back to full repayments, what their options are.”

ABA chief Anna Bligh says Aussies might need more help after the deferral period ends in September. Picture: Bianca De Marchi/AAP

Over the last two weeks, three of the big four banks have reported massive profit losses of up to 70 per cent for the six months of business, while Westpac and ANZ deferred paying a dividend to its shareholders following guidance from prudential regulator APRA that banks and insurers should seriously consider doing so until the economic outlook is clearer.

“They have gone into this crisis stronger than they have ever been and they are well placed to play the role of a shock absorber as this enormous impact of COVID-19 hits the economy,” Ms Bligh said.

“This is not without pain for banks but they are strong and they are able to continue to help.

“Nobody wants to see anybody fall off a cliff and we are working through options right now with regulators, talking to government about what might be possible at the other end of this six months.

“Let’s hope that the economy, by then, is in a much stronger position than it is today.”