Bank customers need to show circumstances have changed to get a deferral

Australians looking for help with their mortgage and small business loans will need to show their circumstances have changed to get a deferral this time around.

With Sydney’s Covid-lockdown set to continue for weeks and the possibility of more across the nation, Australians looking for help with their mortgage and small business loans will need to show their circumstances have changed to get a deferral.

This year, banks will deal with customers on a case by case basis with options such as moving to interest-only payments for a period, restructuring the loan or partial repayments, plus redraw facilities.

It is differs from last year when lenders deferred repayments without question, thanks largely to changes to the industry’s reporting obligations at the start of the pandemic, it is different this time around.

Either way, experts agree that homeowners need to act fast if they expect to struggle with their mortgage.

WHAT IS AVAILABLE

Government financial respite is also available to businesses across NSW that have suffered at least a 30 per cent drop in revenue as a result of the lockdown and will be paid up to $10, 000 a week to cover costs provided they keep their staff.

Australian Banking Association CEO Anna Bligh. Picture: Bianca De Marchi

Small businesses, particularly those across retail, travel, tourism and hospitality have been hit the hardest during the coronavirus crisis since March last year.

Australian Banking Association, led by former Queensland Premier Anna Bligh, says help is available for home and small business owners.

“Assistance will be available to all small businesses and home loan customers who can demonstrate they have been significantly impacted by current lockdowns or by a slower recovery from recent lockdowns,” an ABA spokesman says.

“Given the various arrangements customers have with their bank the best advice is, call your bank about what relief might be available to you. Don’t wait until you are in over your head, Australian banks stand ready to assist.”

HOW TO TACKLE YOUR BANK

Customers of Australia’s biggest bank, Commonwealth Bank, that have been impacted by the latest restrictions won’t need to provide evidence to secure a short-term deferral.

However, its teams will ask a series of questions to understand the customer's situation and then educate customers on what the deferral means for them, a CBA spokeswoman says.

For both individual and business home loan customers, CBA has announced that it will offer “a range of targeted support to those most in need, including deferrals on a month-by-month basis”.

A spokesman for National Australia Bank said it will work with customers individually with support, “which could include options such as moving to interest-only for a period, restructuring the loan or partial repayments”.

LOAN CHANGES AVAILABLE

“We have bankers who are experienced and well versed with helping personal and business customers make quick decisions and put in place solutions to help them get through this,” he said.

For small businesses, NAB is offering loan deferrals of up to three months for eligible customers. Other support includes restructuring of business facilities, along with reduced or waived applications fees.

An ANZ spokesman urged impacted customers to have a “detailed discussion” with them about their financial position.

“We have a range of options available to assist retail and business customers including accessing redraw facilities, switching to interest only payments or temporarily reducing repayments.”

Westpac is also “committed to offering home loan deferrals to those impacted by Covid-19”, with a spokeswoman urging customers to get in touch or complete its online financial hardship form.

For its business customers, repayment deferrals and other measures are available.