Many Australians face the prospect of losing their job or hours of work and face increased pressure on household budgets. Banks say they are ready to help, here is what they are going to do.
To support those affected by the pandemic the big four banks have announced measures such as deferral of payments, reduced home loan rates
Australian Banking Association (ABA) chief executive Anna Bligh says: “Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible.”
The ABA notes the type of assistance offered will depend on individual circumstances.
They may include a deferral of scheduled loan repayments, waiving fees and charges, interest free periods or no interest rate increases and debt consolidation to help make repayments more manageable.
Commonwealth Bank has announced 0.70 per cent reduction to one, two and three year fixed home loan rates and a 0.60 per cent increase for 12- month term deposits to 1.70 per cent. All home loan customers will be able to defer their repayments for up to six months should they need to.
ANZ will decrease variable interest home loan rates in Australia by 0.15 per cent across all variable rate indices, effective from 27 March 2020, it has introduced a two-year fixed rate of 2.19 per cent per annum for owner-occupiers paying principal and interest and access to a deferral of home loan repayments for up to six months.
NAB home loan customers on either principal and interest and or interest-only can pause their home loan repayments for up to six months. It has introduced a 10-month term deposit offering 1.75 per cent per annum. The bank notes that redraw will be revoked for customers during this repayment pause.
NAB says: “After a repayment pause, customers are required to bring their account up-to-date over an agreed period of time. This will result in monthly payments being adjusted.”
Westpac has announced a $10 billion home lending commitment to support more Australians into their next home, a 2.29 per cent per annum fixed rate home loan for one, two and three years for owner-occupied customers on principal and interest repayments.
It has introduced a 12-month term deposit offering 1.70 per cent per annum and an 8-month term deposit offering 2 per cent per annum for Australians aged 65 and over.
Westpac says: “Customers who have lost their job or suffered loss of income as a result of the outbreak can contact us for three months deferral on their home loan mortgage repayments with extension for a further three months.”
Australian banks will defer loan repayments for six months for small businesses affected by the coronavirus outbreak.
Bligh says: “This assistance package will apply to more than $100 billion 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 are putting in place a fast track approval process to ensure customers receive support as soon as possible.
The big four have outlined the hardship provisions for their business banking customers:
ANZ’s business customers will have access to suspended interest repayments, early access to term deposits without break fees, access to additional approved credit, and a 0.25 per cent decrease in variable interest business loan rates.
The bank has introduced a small business loan for 2 and 3 years up to $1 million at a fixed secure rate of 2.59 per cent.
Commonwealth Bank is deferring repayments and fee waivers for various products, waiving merchant terminal fees for 90 days, deferring repayments on vehicle and equipment finance loans, and tailoring restructuring options, waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts) and waiving establishment fees and excess interest on temporary excess products.
There is also a 1 per cent reduction to all existing cash-linked small business loans and business loans
NAB is deferring business loan repayments and extension of business loan terms (up to three months), giving support to restructure existing business loans including equipment finance and offering business credit card deferred repayments.
There is a 1 per cent reduction on variable rates for small business loans and a 2 per cent reduction to new loans and all overdrafts on QuickBiz.
Westpac is offering business customers fee-free redraws on loans, deferred loan repayments by up to three months, options to extend business loan terms by up to three months, restructuring and consolidation of loans, access to term deposit funds without a reduction in interest rates, deferred payments for business credit cards and access to business finance counselling
There is a 2 per cent reduction to overdrafts for new and existing business customers and a 1 per cent reduction to variable interest rates on small business cash-based loans.