Cap on hardship withdrawals from home loans increased

Wednesday 19 August 2009

Article by Mozo

It has been announced this week that people under financial hardship will be able to withdraw funds from frozen home loans funds.

The Australian Securities and Investments Commission (ASIC) stated operators will now be able to make payments to fund members who are struggling with money.

According to the organisation, the cap on withdrawals will increase from $20,000 to $100,000.

In addition, the criteria for receiving money from frozen home loans will be expanded to include beneficiaries of the deceased and long-term unemployed people.

Currently, the grounds on which investors can withdraw funds include an inability to meet family living expenses and compassionate reasons, such as medical costs or funeral expenses, as well as cases of permanent incapacity.

Commenting on the move, ASIC commissioner Greg Medcraft said: "We have expanded hardship relief to pick up special situations where the industry considers that further discretion for relief is needed."

The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability Index recently stated property is more affordable, which may be of interest to those looking to compare low interest home loans.

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