IO loans set to be offered in big banks' response to coronavirus crisis

The NAB will allow borrowers to pause mortgage repayments for up to six months, it announced this morning.

NAB will also cut 200bps from rate on new loans as well as reductions of up to 60bps on fixed rate home loans.

The other three of the big four banks have yet to reveal any response to alleviate mortgage repayment obligations for residential home loan borrowers.

It is predicted the banks will allow existing loan payments at principle and interest to be lowered by swinging borrowers over to interest only loans.

The move would require regularly approvals since there have been limits on IO lending for several years.

The banks have though, it seems almost entirely, decided not to cut home loans rates following the RBA emergency decision.

Of the big four only ANZ cut variable home loan rates, they were reduced 0.15 basis points.

Australian Banking Association CEO Anna Bligh today announced a small business relief package from Australia's banks.

Australian banks will defer loan repayments for six months for small businesses who need assistance because of the impacts of COVID-19.

Ms Bligh said the assistance package will apply to more than $100 bn of existing small business loans and depending on customer take up, "could put as much as $8 billion back into the pockets of small businesses as they battle through these difficult times."

Banks have developed this Small Business Relief Package following discussions with APRA and ASIC to provide the appropriate regulatory treatment.

"The package is subject to authorisation by the ACCC," she said.

Treasurer Josh Frydenberg told Sky News the government is working on a second stimulus package, "which is about cushioning the blow for so many of those Australians who may lose their job."

"Our focus is on targeted measures using the existing tax and transfer system and making it as simple and as easy as possible for Australians to get that support," the treasurer said.