Thousands freeze mortgage payments as Sydney shutdown looms
Banks have frozen repayments on 14,500 home loans as a result of the latest round of lockdowns, highlighting the rising financial cost imposed by restrictions in New South Wales, especially.
The Australian Banking Association (ABA) is to release figures on Friday showing that the number of suspended home loans in response to the growing COVID-19 outbreak in Sydney is far less than last year’s peak of crisis, but rising rapidly as the blockade is prolonged.
Last month, Banks re-established emergency support measures for customers in difficulty., including the ability for individuals to temporarily suspend repayments on their home loans.
ABA data showed that in addition to the 14,500 mortgage deferrals granted since July 8, payments on more than 600 business loans had also been deferred.
NSW accounted for more than 10,000 of the mortgage deferrals, and the number of distressed borrowers is likely to continue to rise as the Greater Sydney lockdown continues.
ABA CEO Anna Bligh said banks would also be closely monitoring the impact of the closure in Queensland and the expansion of the Greater Sydney closure in the Hunter and Upper Hunter Regions on Thursday.
“What the data tells us is that prolonged lockdowns result in financial hardship for literally thousands of people,” Ms Bligh said.
Ms Bligh said that borrowers can usually get by with lockdowns of two to three weeks. But when the closures dragged on for a longer period of time, more people struggled as they lacked sufficient reserves, such as savings.
Sydney borrowers relying on construction activity have been particularly hard hit, Bligh said, noting that construction sites had not been closed in 2020.