450,000 Australians are about to get a call from their banks as mortgage deferrals end

Hundreds of thousands of Australians are set to receive a call from their banks as loan repayment deferrals begin to end in September and October for some mortgage and business customers.
According to the ABA (Australian Banking Association), over 450,000 borrowers who arranged to have their loans deferred towards the start of the COVID-19 pandemic will be contacted by their banks in the next few weeks for a six month assessment.
That number includes 260,000 mortgage holders and 105,000 small and medium business customers, with hundreds of thousands more likely to follow in the months ahead.
“The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5000 new or redeployed staff working to ensure customers understand their options,” said ABA chief executive, Anna Bligh.
Is further payment relief available?
So what options will be on the table when that call comes in? According to the ABA, that depends on the financial situation of the borrower:
- Normal repayments resume: Borrowers who are in a financial position to do so will need to start making their usual repayments again.
- Loan restructure: Customers who are continuing to experience financial problems will be able to work with their banks to find a solution. This could involve switching to interest-only repayments for a period or lengthening the actual loan term.
- 4-month deferment extension: Some borrowers experiencing hardship may be offered a further repayment deferment extension of four months, though this won’t be available in every situation.
Corporate regulator ASIC has also issued guidance to lenders about how they need to approach these conversations with borrowers.
That includes ensuring that customers are given information that will help their decision making’ (e.g. any financial implications of a loan restructure or deferral) and making sure that the assistance offered is actually tailored to the individual customer, not just a broad-based solution.
Is refinancing an option?
One of the common tactics used by mortgage holders to reduce the size of their repayments or pay off their home loan faster is to refinance to a better value loan.
But while refinancing may seem like an attractive option for many at the moment, is it actually possible for borrowers who have deferred their repayments? According to Mozo Property Expert, Steve Jovcevski, that depends on their financial situation.
“Lenders take into account the financial position and recent repayment history of any new applicant in order to make sure they can service the loan,” he says. “So if you’ve deferred your repayments for the last six months, lenders are going to be able to see that your recent repayment history isn't there.
“That doesn’t mean it’s impossible though, especially if you’re no longer in the same situation you were when you asked for that deferral in the first place - perhaps your hours at work have increased or you’ve got a new job, so you’ve been able to start making repayments again.
“My advice before going to refinance with a new lender would be to get some repayments under your belt first, because two to three months worth of repayment history will give you a much better chance of getting a new loan approved.”
RELATED: Give yourself an instant pay rise by refinancing your home loan
For more information about the different types of financial relief on offer from banks and insurers, check out our comprehensive runthrough on everything you need to know about Coronavirus and your finances.
Refinance home loans - last updated 25 June 2022
-
Smart Booster Home Loan
2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment2.60% p.a.variable for 24 months and then 3.00% p.a. variable2.96% p.a.New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
CompareCompareSmart Booster Home Loan
New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
- interest rate
- 2.60% p.a.variable for 24 months and then 3.00% p.a. variable
- comparison rate
- 2.96% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - with 0.10% additional interest
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
Read our Mozo Review to learn more about the Smart Booster Home Loan
-
Featured Product
Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment2.64% p.a. variable2.65% p.a.Low variable rate. Ideal for buyers or investors. No annual fees to pay. Unlimited additional repayments. Free redraw facility available. Fast digital application. 40% deposit required.
CompareCompareNeat Home Loan
Low variable rate. Ideal for buyers or investors. No annual fees to pay. Unlimited additional repayments. Free redraw facility available. Fast digital application. 40% deposit required.
- interest rate
- 2.64% p.a. variable
- comparison rate
- 2.65% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
- $5,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
Read our Mozo Review to learn more about the Neat Home Loan
-
Unloan Variable
Owner Occupier, Refinance Only
interest rate
comparison rate
Initial monthly repayment2.64% p.a. variable2.56% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 2.64% p.a. variable
- comparison rate
- 2.56% p.a.
- Ongoing fees
- -
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $3,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
Read our Mozo Review to learn more about the Unloan Variable
-
Variable Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment2.64% p.a. variable2.66% p.a.Purchase and Refinance. Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, optional 100% offset account. Enjoy a simple online application.
CompareCompareVariable Home Loan
Purchase and Refinance. Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, optional 100% offset account. Enjoy a simple online application.
- interest rate
- 2.64% p.a. variable
- comparison rate
- 2.66% p.a.
- Ongoing fees
- $0.00
- Discharge Fee
- $500.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - $10 per month
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
Read our Mozo Review to learn more about the Variable Home Loan
-
Discounted Variable Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment3.44% p.a. variable3.83% p.a.Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. Refinance and get up to $3,000 cashback. LVR ≤90%. $2,000 cashback for loans ≥ $250k, plus bonus $1,000 for loans ≥ $500k. Limited time offer extended, T&Cs apply.
CompareCompareDiscounted Variable Home Loan
Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. Refinance and get up to $3,000 cashback. LVR ≤90%. $2,000 cashback for loans ≥ $250k, plus bonus $1,000 for loans ≥ $500k. Limited time offer extended, T&Cs apply.
- interest rate
- 3.44% p.a. variable
- comparison rate
- 3.83% p.a.
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- Up to $3,000 cashback when you refinance your home loan from another financial institution when you apply by 30 Sept 2022 and are funded by 30 Nov 2022, LVR <90%. $2,000 cashback for loan amounts of $250,000 and a bonus $1,000 for $500,000 or more.
Read our Mozo Review to learn more about the Discounted Variable Home Loan
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
^See information about the Mozo Experts Choice Home Loan Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.