Mortgage holiday extensions help avert $75 billion home loan blowout

By Niko Iliakis · · 2 min read
Fact Checked
Advertiser disclosure

The decision by some banks to extend mortgage deferrals will come as a relief to struggling Australians, who were only a few months away from a financial cliff. But it may have also prevented a potentially devastating shock to the economy.

Around 485,000 mortgage customers have paused their repayments due to coronavirus-induced hardship, totalling $175.5 billion in home loans, according to the Australian Banking Association.

Mozo analysis found that were it not for today's decision to extend mortgage holidays for eligible customers by an extra four months, the potential default figure could have reached $75 billion.

While the Government’s JobSeeker and JobKeeper programs have done a lot to keep households and businesses afloat, for many the payments have proven to be woefully insufficient.

A June survey commissioned by Mozo found that 38% of people on JobKeeper admitted it was not enough to meet their current bills, let alone cover home loan repayments.

53% of mortgage holders surveyed were also worried they would have to sell their home if they were still facing financial hardship once the original mortgage holiday ended. 

RELATED: More support on the way as banks extend mortgage holidays

With millions out of work or getting by on reduced incomes, the continued flow of stimulus is necessary to ease the burden Australians are facing. The question now is whether JobKeeper and JobSeeker will be preserved in some form.

In an interview with Sunrise this morning, Treasurer Josh Fydenberg said another phase of income support - which will be both “targeted” and “temporary” - will be announced in his economic statement on 23 July. 

The comments from the Treasurer follow a surge of infections in Victoria, which has left the state scrambling to re-enter lockdown.

And given Victoria makes up a quarter of the national economy, the reintroduction of restrictions will be an enormous setback in Australia’s road to economic recovery.

“What we know from Victoria is that these are very serious developments. They affect the nation as a whole, and we are at a pivotal moment in the coronavirus crisis,” Frydenberg said.

For more information about the assistance available to households and businesses, along with tips to keep your finances in good health amid the current crisis, browse our guide to coronavirus and your finances.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 23 November 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

Promoted

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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 online in minutes.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    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 online in minutes.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

Showing 6 of 430 home loans. Use the filters to see more
image of houses

Need help with your Home Loan?

Whether you're looking to purchase a new home or refinance your existing loan, our friends at Lendi can help! Lendi’s expert advice is completely free of charge. Book an appointment and enter the draw to win $30K.

Learn more

* 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. You can change the loan amount and term in the input boxes at the top of this table. 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.

Compare home loans