Banks providing thousands of loan deferrals as lockdowns continue

The Australian Banking Association says more than 20,0000 customers have received hardship assistance during recent lockdowns, including just over 15,000 repayment deferrals on home and business loans.

Since 8 July this year, more than 14,500 home loans have been deferred, while over 600 business loans have been deferred. Comparatively, during the peak of the crisis in 2020, almost 500,000 home loans and more than 225,000 business loans were deferred.

According to Anna Bligh, Chief Executive Officer of the association, customers should not tough it out on their own.

Support available to small business and home loan clients

“Lockdowns continue to bite across several states, and banks are again stepping up to help,” she said.

“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns – or [who are] recovering from recent lockdowns, irrespective of geography or industry.”

Hardship approvals and loan deferrals are heavily skewed toward NSW residents due to the continued lockdown in that state.

The association says its member banks are reporting that many calls for assistance in NSW came from business and families affected by the recent shutdown of the construction industry.

Two-thirds of all loan deferrals come from New South Wales

NSW home loan deferrals account for more than two-thirds of total deferrals across Australia, while almost 80 percent of deferred business loans are also from NSW.

The number of customers accessing hardship assistance grew by 73% in the past week, compared with a growth of 153% the week before. Growth in housing loan deferrals similarly slowed from 344% to 79%, while growth in business loan deferrals grew from 93% to 108%.

According to Bligh, banks have dedicated hardship teams who stand ready to listen and consider a range of options that suit customers’ circumstances. Almost 24,000 people since early July have accessed a range of support measures offered by their bank, and 64% of these have opted to defer their loan repayments for up to three months. 

“Given the lockdown situation in South-East Queensland, banks stand ready to assist customers who need help [there],” she noted.