Mortgage deferrals see a take-up rate of around 10%: RBA

At their May meeting, the RBA board noted that housing borrowers loan payment deferrals have seen a take-up rate of around 10 per cent.

However, they did note there were many other borrowers maintaining mortgage payments in excess of their required minimum payments.

RBA Governor Philip Lowe said the sharp decline in economic activity was expected to dampen the demand for borrowing from businesses and households for some time, although added that the Australian banking system remained resilient with its strong capital and liquidity buffers.

"[The banks are] helping the economy traverse this difficult period," Lowe said.

"Banks had reduced housing interest rates to record lows.

"Members observed that a large share of the monetary policy easing since May 2019 had been passed through to variable mortgage rates, and advertised fixed mortgage rates had declined even further over recent months.

"Banks had also offered housing borrowers loan payment deferrals for up to six months", Lowe added.

Lowe touched on business borrowers too, with interest rates also lowered substantially since mid March in light of the bank's policy package, as well as government initiatives to support lending to small and medium-sized businesses.

"Interest rates for small businesses had declined most and many of these businesses had been offered loan payment deferrals for up to six months," Lowe said.

"Liaison with banks suggested that around 20 per cent of eligible businesses had taken up this option."

To read the full RBA minutes, click here.