Today Anna Bligh from the Aust Bankers Assoc was asked what measures are being offered to personal customers. Her response was that lenders were monitoring the impact and will deliver more specific measures as matters become known. Immediately following this NAB have announced PERSONAL home loan borrower assistance measures. First out of the gates. 1. Pause home loan repayments for up to six months, including a three-month checkpoint (their words !) . For a customer with a typical home loan of $400,000, this will mean access to an additional $11,006 over six months, or $1834 per month. 2. Access fixed home loan rates of 2.39 per cent p.a. for 1-year, 2.29 per cent p.a. for 2- and 3-year, and 2.79 per cent p.a. for 5-year (owner-occupier P&I), effective March 25. First home buyers will have access to a rate of 2.19 per cent p.a., fixed for two years. This delivers reductions of between 10 and 60 basis points 3. Access over $20 billion in redraw and more than $30 billion in offset. Note: Around one in two accounts are at least six months ahead based on redraw and offset balance; and four in 10 are 12 months ahead. This is a signal that banks wont lock up offset or redraws. 4. Reduce repayments on existing variable rate loans. Over the past 12 months, reductions of 84 basis points to our owner-occupier variable rates have provide a potential benefit of $3360 per year to customers with a $400,000 loan. Most customers have not yet taken the option to reduce their payments. The bank will open a restrospective redraw on request to release this excess to customers who dont have a present redraw facility. Note the bank has referred to these measuers as PERSONAL home loan assistance. They are clearly restricting the offer to non-investment loans it seems.
2pm Update : Westpac has followed this with less details National Australia Bank and Westpac say they will allow eligible mortgage customers thrown into difficulty because of the coronavirus crisis to defer their mortgage repayments for up to six months. As part of the plans, which will also include an industry-wide deferral of repayments for affected small business clients, both banks have said customers in financial distress because of the coronavirus should contact their bank to discuss a "repayment holiday".
anz have done pretty much the same BUT also gave 0.15% off variable rates and 1yr 2.19% what about cba they seem to be the worst out of the bunch yet again no mention of personal loan assistance yesterday?
I wonder if the interest continues to accrue during the repayment holiday? And do borrowers have to show they are in financial trouble? How? I'm not asking for us, because we have paid ahead to relieve the monthly loan repayment pressure as we build, (plus our loans are investment property loans) but more that I'm curious to know how the banks choose who gets this repayment holiday.
The repayments are deferred. Interest should normally continue to accrue. There is no interest holiday. Penalties and penalty interest would also be waived and no black marks on a credit report too. But compounding interest could accrue. Each bank has its own policy. I would imagine that a suitable need must be evident. Its not a free swing. ie lost job, unpaid leave etc. Banks want to ensure that those in need are assisted. Not those who would rather not meet their agreed terms to bank some cash. They way well say - Call us back when you are impacted.
ANZ is introducing a six-month pause, reviewable after three months, while Westpac is bringing in a three-month pause which is extendable to six for those who have lost their jobs. All announcements so far are consistent with the view it is for owner occupier. Not investors and based on need not greed to save cashflow
I’m not sure it’s clear that it’s solely for OO. Happy to be corrected, but reads to me that it’s intentionally vague so discretion can be applied. Virus can affect people in many different ways. Goal is to support the economy through this economically tough and uncertain time. It shouldn’t matter if OO or INV in my opinion.
