Three of the country’s largest banks have conceded that they will increase interest rates for those financially distressed customers planning to make interest-only repayments after the mortgage holiday period ends.
NAB, Commonwealth and Westpac have admitted that rates will be higher for those customers only paying interest on their home loans, as opposed to those who pay principal plus interest.
Sally Tindall, research director at consumer advocacy organisation RateCity believes the opposite should be true.
โThe banks have been told by ASIC to be fair and flexible in their negotiations, and to help people stay in their home, if itโs in their best interests,โ Ms Tindall said.
โYet some banks are planning on charging COVID-affected customers a higher rate if they switch to interest-only repayments.
โThese customers should be getting a rate cut, not a rate hike. Asking people to pay more interest when they are in financial distress doesnโt seem fair or reasonable.
โSome of these people, through no fault of their own, have had their livelihood striped from them. They donโt know when theyโll be back on their feet again and they are stressed and scared.
โThey need genuine help from the banks, not a bigger interest bill.
โWhen your bank calls, ask them for a rate cut to help relieve the pressure. Theyโve said they are here to help โ hold them to it,โ she said.