Home loan deferrals spike amid Covid lockdowns

More than 18,100 home loans are in deferral across the four major banks
Home loan deferrals spike amid Covid lockdowns
Jonathan ChancellorAugust 23, 2021
Data from by the Australian Banking Association shows the number of home loans in deferral given the pandemic lockdown jumped by almost 20 per cent in early August. NSW has the highest numbers. In the week to August 15 more than 18,106 home loans were into deferral across the big four banks. NSW accounted for 13,256 of the total loan deferrals, followed by ­Victoria with 2813 and Queensland with 1140. It took NSW to 23,001 bank customers granted hardship assistance. As at early August the data collected by the Australian Banking Association from the big four banks, and Bendigo and Adelaide Bank, revealed that 15,298 loans had been deferred since July 8. The deferrals come as a national survey by comparison website Finder suggests a single mortgage rate rise would be enough to push one in 20 home owners into financial hardship. A home loan rate hike would see 5 per cent of borrowers in financial hardship leaving them requiring financial assistance, according to Finder. “The financial health of Australians has been knocked around over the past 18 months, with many entering current lockdowns with very little reserves,” said Kate Browne, a personal finance expert at Finder. “There’s a risk this further economic shock could lead to Australians falling behind on their mortgage payments if they don’t have adequate support.” Prospa, the small business lender, has provided an update on small business, advising that as of August, 2.1 per cent of its customer accounts were on part-payment arrangements and a further 1.3 per cent were on full deferral. The Commonwealth Bank revealed only 240 new deferrals for business customers' loans as at July 31, less than 0.1 per cent of its portfolio. At the height of the pandemic last year the bank, the nation's biggest, gave 83,000 business borrowers a repayment holiday. Australian Banking Association data had from July 8 to the first week of August about 600 business loans nationally were in deferral compared to 225,000 business loans last year.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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