National Australia Bank and Westpac say they will allow eligible mortgage customers thrown into difficulty because of the coronavirus crisis to defer their mortgage repayments for up to six months.
As part of the plans, which will also include an industry-wide deferral of repayments for affected small business clients, both banks have said customers in financial distress because of the coronavirus should contact their bank, with the possibility of "repayment holidays".
Westpac and NAB say they will extend mortgage repayment holidays for up to six months, subject to a review.Credit:Louise Kennerley
Both banks had already said eligible customers could get up to three months mortgage relief. But under the new plans, the banks say they will offer some people an extra three months repayment holiday on top of this, subject to a review.
NAB chief executive Ross McEwan said: "Our view was we needed to be out there in support of business and personal customers because. The impact flows from businesses to the individual customers."
It came as both banks said they could not cutting variable mortgages interest rates on mortgages in response to this week's emergency rate cut, while slashing business lending rates by 1 percentage point and also cutting fixed rates deeply.
NAB said that with a $400,000 mortgage, six months of not making repayments could save a customer $11,006 in total.
Westpac offered a similar arrangement, saying: "Westpac customers who have lost their job or suffered loss of income as a result of COVID-19 should contact us for three months deferral on their home loan mortgage repayments, with extension for a further three months available after review."
Mr McEwan said that customers in trouble with their home loan would have a "check-in" at the three month mark, and if they were struggling they may be moved to the bank's hardship program.
"If they are really struggling we may assist in a different way… through hardship arrangements, and we may just be giving more help to them,” he said.
The announcements come after the Reserve Bank on Thursday slashed interest rates to 0.25 per cent in an attempt to shield the economy from the escalating health crisis.
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