Commonwealth Bank of Australia Ltd (CBA) says it will offer home loan repayment “holidays” to customers who lose their jobs during the economic downturn. A CBA spokesman said the bank’s management have implemented the policy as a result of the unprecedented nature of the global economic downturn. “We wanted to work with any of our customers who become unemployed, and so we’re offering them the opportunity to have a six month and up to twelve month repayment holiday on their home loan”.
Interest on the loan would still capitalise, and repayments recommence as normal at the end of the moratorium period. The term of the loan would also be extended by the length of the repayment freeze.
CBA is Australia’s largest mortgage lender
. Its senior executives first discussed the repayment deferral proposal in January, the spokesman said, but the Victorian bushfires and Queensland floods had delayed its implementation. “We deferred this until we got over the hump of all that,” the spokesman said. “It’s basically because we saw that this is unprecedented this economic thing that we’re in, and customers are going to be affected.” CBA denies the repayment deferrals are a result of pressure from the federal government to offer relief to home owners during the economic downturn.
ANZ said it already made mortgage repayment deferral programs available to customers who experienced hardship. “We’re looking at how we extend and formalise those and we certainly hope to be in a position in the near future to announce an extended hardship package, particularly for those who face unemployment,” an ANZ spokesman said. Comment was being sought from Westpac and National Australia Bank.
National Australia Bank said it also already offered mortgage repayment deferrals to customers who experience hardship. "This is something we’ve been doing for quite some time, so in regards to the CBA announcement we’ve been offering that for a while,” an NAB spokeswoman said. “While we do do repayment holidays, it’s just one of a number of options we look at on a case-by-case basis.”
