Westpac home loan customers who have been financially impacted by COVID-19 will have access to extended repayment relief on their mortgages following an announcement by the major bank on May 23.
According to Westpac, eligible customers making interest-only payments will be able to extend that interest-only period for up to 12 months, while customers making principal and interest payments will be able to make the switch to interest-only payments for the same period.
The latest initiative follows an earlier move by the bank to allow customers who have lost income as a result of the coronavirus outbreak to defer mortgage repayments for up to three months, with the opportunity for a three month extension subject to review.
According to recent figures from the Australian Banking Association (ABA), 429,000 mortgages have been deferred as a result of COVID-19, with Westpac home loans general manager Will Ranken confirming that over 100,000 Westpac customers have taken up the opportunity.
“We have had more than 115,000 customers defer mortgage repayments as part of our COVID-19 consumer support package,” he said.
“However, we recognise that many customers who have been financially impacted by COVID-19 still want the option of making some repayments during this time. These changes mean it is now simpler for customers to apply to extend their interest only loan term, or switch their repayments to interest only.”
The bank has encouraged mortgage holders to weigh up the benefits and drawbacks of extending or to interest-only repayments though. While the additional money saved could be of use to impacted households now, it will still need to be repaid down the line.
Similarly for borrowers who have deferred home loan repayments, interest and fees that go unpaid during the deferral period could be added to the outstanding loan balance resulting in higher repayments later on.
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For more information about the financial response from Westpac and other Australian banks to the COVID-19 outbreak, make sure you check out our comprehensive guide on everything you need to know about Coronavirus and your finances.