Westpac to pay mortgages for customers whose homes have been destroyed by bushfires

Customers who have lost their homes will have mortgages paid by the bank for a year.

Westpac acting chief executive Peter King said the bank was committed to helping customers and the community recover over the longer term. Picture: AFP

Westpac customers whose homes have been destroyed in the months-long catastrophic bushfire season will have their mortgages paid for an entire year as part of the bank’s efforts to assist communities affected by the crisis.

The bank’s bushfire recovery support package will also see customers offered interest-free loans to cover the gap between insurance payouts and rebuilding costs, while businesses will be provided with low-interest loans, Westpac announced on Monday. It has also pledged a further $2.5m for bushfire emergency cash grants, taking the total to $3m.

Announcing the relief package, Westpac acting chief executive Peter King said the bank was committed to helping customers and the community recover over the longer term.

“These initiatives are designed to provide practical, on the ground support for our customers, our people and for those who are caring for affected communities,” he said.  

“In times of such unprecedented devastation, we want customers and communities to know we’re here to help alleviate financial concerns so they can rebuild their lives, homes and businesses.” 

Customers who have lost their principal place of residence due to the bushfires will have their mortgages repaid by the bank for one year, up to a limit of $1,200 per month. 

The bank has also allocated $250m in interest-free home loans to help customers rebuild ravaged homes, while those whose homes have been damaged or destroyed can also go into their local branch and pick up $2000 in emergency cash. 

Customers of Westpac subsidiaries including St. George, Bank of Melbourne, BankSA, BT and RAMS can also avail of the support package. 

Separately, the bank has said it will not foreclose on any farming businesses in the affected areas for three years and will provide a $15,000 grant to business customers who need to refurbish damaged premises. It is also offering a 2.83 per cent three-year variable rate for business customers rebuilding premises, up to $1m for each individual loan.

 The newly announced measures are in addition to the $1m Westpac has already contributed to community groups such as The Salvation Army Emergency & Disaster Appeal, state-based volunteer services and state bushfire appeals. 

Each of the big four banks has pledged at least $1m in bushfire donation packages to assist communities devastated by the crisis.  

CBA has also donated a further $250,000 to the Australian Red Cross and last week CEO Matt Comyn parted with $1m to snap up Shane Warne’s baggy green cap at a charity auction. Proceeds from the auction will also go to the Red Cross. The bank also pledged at least $10m in bushfire recovery grants and has so far raised more than $1.4m for the Red Cross through its branches and app, which it says it will dollar match. 

NAB, meanwhile, has pledged a further $4m to customers affected by the bushfires, providing $2000 grants to those affected and has committed to not foreclose on or force the sale of existing loans for up to three years. Bank customers may also be eligible to defer repaying their loans for up to three years, the bank said.  

ANZ staff have donated more than $100,000 to bushfire relief efforts, which the bank says it will match. It also donated $500,000 worth of advertising space to St Vincent de Paul.

The pledges from each of the big four comes as rating agency S&P Global said the impact of the bushfires pose no immediate risk to bank ratings but that losses from business lending, including to the agricultural and tourism sectors, could become more significant due to the longer-term and second-order effects. 

“Credit losses arising from bank loans to agricultural and tourism related sectors could become significant, in our opinion. Lending to these sectors forms about 10 per cent of the total Australian bank business lending … These sectors are likely to suffer short- and long-term damage from the fires because of the loss of productive assets such as livestock, fruit bearing trees, and tourist accommodation as well as potentially reduced tourist attractiveness,” the ratings agency said.