Cash-strapped Aussies still unable to pay mortgages
More than half of all mortgage customers who put their repayments on hold during the pandemic are still unable to pay their loans.
New figures from the Australian Banking Association reveal more than half of the 500,000 mortgage holders who deferred their repayments are still accepting a lifeline from their lender.
Data from the nation's seven largest banks including the Commonwealth Bank, ANZ, National Australia Bank, Westpac, Bendigo and Adelaide Bank, Suncorp and Bank of Queensland show about 270,000 customers are still struggling.
The average home loan size deferred is about $360,000.
The number of deferred business loans fell from about 198,000 in June down to 116,000 this month, with the average SME loan size deferred being $200,000.
Repayment holidays were originally given to customers for up to six months with the option of seeking an additional four months' extension on their deferral period if required.
Financial adviser Scott Haywood said the situation was "dire" with so many Australians still unable to meet their repayments.
"Customers knew six months ago this time was going to come to an end," Mr Haywood said.
"If they are on JobKeeper payments they won't be able to refinance and you will start to see banks have mortgagee options.
"It will be a gradual process but it is a very serious situation, if you're on a repayment holiday you need to call your bank and discuss your options."
Of the 270,000 mortgages still deferred about 237,000 are home loans, with the remaining 33,000 commercial mortgages.
In the past month 130,000 mortgage customers and 50,000 SME business loan customers starting making repayments again.
The Australian Banking Association's chief executive officer Anna Bligh said hundreds of thousands of customers are still unable to meet repayments.
But she said of those who could - it was "a good sign for the economy".
"It shows that more Australians are getting back on their feet and resuming their loan repayments," Ms Bligh said.
"These loan deferrals have helped hundreds of thousands of Australian families and small businesses survive pandemic."
Ms Bligh urged borrowers who were still struggling financially to "contact their bank to figure out the path ahead."
"Banks will work with customers to figure out a tailor-made solution, that might include restructuring a loan or in some cases granting an additional four-month deferral."
Of all loans deferred it totals about $130 billion.
Originally published as Cash-strapped Aussies still unable to pay mortgages