Figures from the Australian Banking Association (ABA) have revealed that more than 23,000 customers have received hardship assistance during recent lockdowns, including just over 15,000 repayment deferrals on home and business loans.
Since 8 July 2021, more than 14,500 home loans and 600 business loans have been deferred across Australia.
Comparatively, during the peak of the coronavirus pandemic in 2020, almost 500,000 home loans and more than 225,000 business loans were deferred.
Hardship approvals and loan deferrals have been heavily skewed towards NSW residents due to the current lockdown (which is due to continue until at least the end of August and could extend further depending on vaccination rates and case numbers).
Home loan deferrals in the state have accounted for more than two-thirds of total deferrals, while almost 80 per cent of deferred business loans are also from NSW.
Data from the big four banks and Bendigo Bank showed that between 8 July and 1 August, there were over 10,400 home loan deferrals and 483 business loan deferrals in NSW.
Across the other states, Victoria had the second highest number of home loan deferrals at 2,580, but only 76 deferred business loans.
South Australia had 620 deferred home loans and 16 deferred business loans, Queensland had 501 deferred home loans and 22 deferred business loans, Western Australia had 245 deferred home loans and six deferred business loans, the ACT had 51 deferred home loans and three deferred business loans, Tasmania had 47 deferred home loans and six deferred business loans, and the Northern Territory had 30 deferred home loans and no business loans.
Growth in housing loan deferrals slowed from 344 per cent the week prior to 79 per cent last week but the growth in business loan deferrals grew from 93 per cent to 108 per cent.
The number of customers accessing hardship grew by 73 per cent last week, which is a slower rate of growth the week prior when it grew by 153 per cent, according to the ABA.
ABA CEO Anna Bligh urged customers not to “tough it out on their own” and seek assistance from their lenders.
She said: “Lockdowns continue to bite across several states, and banks are again stepping up to help.
“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry.”
The major and non-major banks recently expanded on their existing COVID-19 support measures to provide home loan support including deferrals on a month-by-month basis, and business banking repayment deferrals for up to three months, with loan terms extended as required.
Business loan deferrals are applicable to business lending less than $3 million and a turnover of less than $5 million, and is only for loans in good standing (i.e. repayments up to date or engaged in a payment program with their bank).
The Australian Prudential Regulation Authority (APRA) recently extended regulatory relief for banks offering temporary financial assistance to customers impacted by lockdowns, stating that banks will not need to treat the deferral period as an arrears period of a loan restructuring.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.