With several areas around Australia locking down to help halt the spread of COVID-19, several of Australia’s leading banks have introduced measures to provide support and financial relief to customers who are doing it tough.
Banks and other lenders first began offering financial support such as mortgage freezes in March 2020. While many of these programs were initially offered on a temporary basis, with cities such as Sydney, Perth, Brisbane, Darwin, Alice Springs going into lockdown, some banks are offering financial support and relief to affected customers, starting with the Big Four:
- ANZ has announced an extended support package for small business and home loan customers affected by the NSW lockdown, including options for short-term payment relief, waiving fees, restructuring home loan debt or switching to a fixed rate loan.
- Commonwealth Bank is offering short-term repayment deferrals, plus options to access money from home loan offset and redraw accounts, reductions to minimum repayments, and restructuring home loan debts, including switching to fixed rate loans. CBA has also introduced a freeze on forced sales until September 2021 for eligible customers.
- NAB offers support to business and individual customers, including temporary payment reductions or breaks, restructuring home loans or consolidating debt, plus referral to wellbeing and financial counselling.
- Westpac’s support offers include options to waive fees and restructure debts, including deferring or reducing home loan repayments, and reducing home loan interest rates and extending home loan terms. Eligible credit card customers could also see reductions to their credit card repayments and interest rates for a limited time. Referrals to financial counsellors or other support services are also available.
Some other banks and financial institutions that have announced new COVID-19 relief programs include:
- AMP Bank, which is offering to defer home loan repayments, make partial payment arrangements or home loan restructures, or waive fees for affected clients, as well as offering access to free financial counsellors.
- Bendigo & Adelaide Bank, which is offering relief on home loans, residential investment loans, lines of credit, personal loans, business loans, personal credit cards, equipment finance loans or personal overdrafts. Additionally, options are available to restructure or consolidate loans, waive or defer fees, and to enjoy no interest rate reduction for early withdrawals on term deposits.
- BOQ is offering eligible customers affected by lockdowns the ability to temporarily defer payments on mortgages and other loans, or to switch to interest only repayments for a limited time. Fees and charges for non-payment of loans or early access to Term Deposit funds may also be waived, and special arrangements are available in relation to arrears.
- Suncorp, which is offering assistance tailored to each individual customer’s circumstances, with options such as deferring scheduled loan repayments, moving to interest-only repayments, and waiving fees for early withdrawal form term deposits.
Australian Banking Association (ABA) CEO, Anna Bligh, said that “The message from banks is clear: don’t tough it out on your own. Call your bank. They will do whatever they can to help.” According to the ABA, while online and phone banking is available, many bank branches are remaining open as essential services during the lockdowns.
Before agreeing to any changes to your banking or other financial products, it’s important to consider the short and long term impacts your decision may have on your financial circumstances. For example a mortgage freeze could be a necessary option if you have no other way to cover the cost of home loan repayments during lockdown, however the capitalised interest could lead to you paying more interest on you property over the longer term. Consider talking to your bank and/or a financial adviser or mortgage broker before making any commitments.