Requests for mortgage holidays pour in as Kiwis feel coronavirus strain
Friday, 27 March 2020
BNZ says it is currently assessing more than 4000 applications from people who want a mortgage holiday.
Borrowers can now apply to their banks for a six-month mortgage holiday if their income has been affected by coronavirus.
While payments are put on hold for that time, interest still accrues.
A BNZ spokesperson said the bank's staff were working as quickly as possible to get through the applications and make sure a holiday was the right option for everyone who had applied.
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'We are really serious about getting help to everyone that needs it as quickly as we can.'
New Zealander Bankers' Association chief executive Roger Beaumont said the sector was 'stepping up' with the package.
'We know that some customers are already being financially impacted by Covid-19 and have an immediate need.
'Anyone opting into a mortgage deferral needs to be clear about what this means for them. While there are obvious advantages for people in need, repayment deferrals may extend the time it takes to repay the loan and will add interest cost. So it may not be for everyone.'
It has been estimated that someone who has a $500,000 loan could pay an extra $15,000 if they put the loan on hold for six months and then increased their repayments to pay it off - or more than $35,000 if the term of the loan was extended to keep payments the same.
'Banks will have different approaches to how they manage the process for customers to opt into a mortgage deferral. Those details, including eligibility criteria, will be available on bank websites,' Beaumont said.
'Importantly, we'd like to acknowledge the Government's support for this package. At such an extraordinary time we must all stand together to get through this unprecedented challenge to New Zealand.'
Other banks have been contacted for comment.