Commonwealth Bank makes one-off payment to struggling borrowers

Commonwealth Bank will make a one-off payment to customers who’ve deferred home loan repayments due to the virus crisis.

CBD workers walk past the a Commonwealth Bank of Australia branch in Sydney, Monday, June 4, 2018. The CBA has a reached a $700 million dollar settlement over Austrac allegations over anti-money laundering breaches. (AAP Image/Dean Lewins) NO ARCHIVING

Commonwealth Bank has further bolstered its coronavirus support for home loan and credit card customers.

The bank on Thursday announced it will make a one-time payment to all customers who are receiving a home loan deferral because of the coronavirus.

Group executive Angus Sullivan said this meant for an average loan of $350,000, CBA would be refunding approximately $45.

“When a home loan repayment is deferred for six months, interest is calculated and added to the loan balance each month which can result in customers paying interest on interest each month,” he said.

“To support more Australians, we will make a one-time payment to all customers who are receiving a home loan deferral because of the coronavirus.”

Mr Sullivan said the bank would also automatically refund late fees and interest for March for any customer who missed their credit card minimum that month.

It comes after Australia’s big four banks in March all moved to suspend small business loan repayments for six months to guard against the coronavirus.

Other measures previously announced by CBA to curb the impact of coronavirus included the introduction of a 70 basis points interest rate reduction for home loans with one, two and three-year fixed terms to 2.29 per cent, marking a record low.

The bank also rolled out a 60bps interest rate increase on 12-month term deposits for personal customers to 1.7 per cent per annum - 1.45 per cent above the RBA’s official cash rate of 0.25 per cent.

The Reserve Bank of Australia cut the interest rate to a new record low two weeks ago following an ad hoc meeting of the board in response to the coronavirus pandemic.

CBA chief executive Matt Comyn was quizzed on why the bank only cut interest rates for fixed-rate mortgages and not the standard variable rate. He said the bank was focused on providing interest rate relief for small businesses and giving older people with term deposits a bit of a boost.

AAP