Payments have resumed for most deferred home loans

New data released by the Australian Banking Association reveals that two-thirds of deferred mortgages have resumed in a sure sign economic recovery is gathering pace.

Tellingly, the rates of business loan deferrals that have resumed also sits around the two-thirds mark.

“This is an encouraging sign that most Australians are through the worst,” Australian Banking Association CEO, Anna Bligh said.

“Australian banks have played a major role in carrying the economic burden of the pandemic for their customers. The good news is that the majority are now bouncing back as they restart their loan repayments.”

At the peak of the pandemic, close to half a million mortgages were deferred by Australian banks.

According to the latest data, up to November 4, there are still roughly 145,000 home loan deferrals. This figure has dropped by over 100,000 in less than a month.

Loan Deferrals 24 June 2020 November 2020% change 
Business loan deferrals228,07072,909-68%
Of these: SME deferrals198,26265,599-67%
Mortgage loan deferrals493,440169,677-66%
Of these: Home loans436,139145,250-67%
  Total deferrals803,281280,158-65%
Figures by ABA

“It’s great to see a lower than expected number of people needing to extend their deferral period,” Ms Bligh said.

REIA President Adrian Kelly noted it was also good news for tenants, providing increased security to those living in investment properties.

“It also means catastrophic forecasts for Australia’s housing market made at the start of COVID-19 are simply not coming to fruition so customers should have increasing confidence to buy and sell,” Mr Kelly said

“Data published by the Australian Prudential Regulation Authority shows that the overall levels of household saving in Australia increased from March through to October, and Treasury research showed that lower income households were boosted by up to 20 per cent.

“This has contributed to banks seeing borrowers starting to pay back loans.”

The value of deferred loans by the seven largest banks has fallen to $86 billion, from the June peak of more than $250 billion.

Show More

News Room

If you have any news for the Real Estate industry - whether you are a professional or a supplier to the industry, please email us: