Banks to allow deferral extensions

By Gerv Tacadena | 09 Jul 2020

Australian banks will start rolling out measures to extend further help to Australian borrowers who are still struggling amid the COVID-19 outbreak.

Anna Bligh, CEO of the Australian Banking Association, said banks will be offering their clients deferral extensions of up to four months after the initial six-month repayment holiday.

"Those who are able to repay their loans will resume doing so, which is in the best interests of those customers and allows support to be directed to those who need it. Encouragingly, many customers have already chosen to resume making repayments," she said.

Banks will also be providing other options to restructure or vary their clients' mortgages. These options include extending the length of the loan, converting to interest-only payments, and consolidating debts.

"This next phase of bank support will avoid a 'cliff' for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially," Bligh said.

These support measures are consulted with the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.

"Australia's banks supported their customers as the country entered the COVID-19 crisis and they are determined to support their customers on the way out of the crisis," Bligh said.

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