Thousands of households granted Covid-19 mortgage 'holidays' by ASB

Saturday, 4 April 2020

All the big banks are granting mortgage holidays to families hit by big income falls resulting from the Covid-19 pandemic.

ASB has now granted around 2000 mortgage 'holidays' to homeowners struggling after big drops in their incomes as a result of the national lockdown, and the decimation of industries like tourism, retail and hospitality.

It's the latest bank to put numbers on the flood of customers thrown into financial turmoil by Government attempts to eradicate Covid-19. Across the big five banks the number of customers who have sought mortgage holidays now appears to be well over 30,000.

'We have seen a huge increase in our customers contacting us needing additional support over this time, said spokeswoman Holly Ryan.

'Of those contacting us requesting support, several thousand have applied and been granted a mortgage deferral.'

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Deferring payment on mortgages results in homeowners home loans increasing in size, as missed payments are added to the amount they owe the bank.

'While this is a good option for a number of our customers, it may not be the best option for everyone, and so we're working on a case-by-case basis to tailor solutions that are best for each individual circumstance.'

The bank had also seen an increase in customers seeking overdrafts, she said.

'We have seen an increase in customers seeking access to funds on a temporary basis, utilising ASB's customer support package where we provide overdraft funding for customers affected by Covid-19 at 2.95 per cent which is a rate 1.5 per cent below our current variable housing rate.'

The bank has seen a sharp drop in applications for credit cards, and people were spending less, and clearing balances wherever possible.

'With regards to credit cards, we have seen an expected drop off, particularly due to the effects of the lockdown. From a trend perspective comparing to March last year this has been a 12.5 per cent decrease.

'This has translated to balances held on ASB credit cards decreasing slightly in March as customers have continued to make payments but spend less.'

Westpac spokesman Max Bania said by the end of Thursday, it had granted around 3600 mortgage holidays.

By the end of Thursday, BNZ had had around 7000 requests for mortgage relief, and had granted around half.

'As of this morning, we have received approximately 10,800 requests for a mortgage repayment deferral or reduction, and processed approximately 3600,' he said.

It was not only homeowners seeking help.

'We have received hundreds of applications for a business support loan and we expect this number to continue rising in the coming weeks,' he said.

The business support loans are being granted under a $6.25 billion scheme in which the Government guarantees 80 per cent of money loaned by the big banks to small and medium-sized businesses struggling to survive the economic impact of the fight to eradicate Covid-19.

BNZ said it had now had 180 call back request forms for business loans under the scheme since it opened for applications on its website late Wednesday afternoon.

Kiwibank has granted non-guaranteed business loan relief to around 800 small businesses.

ANZ spokeswoman Siobhan Enright said it had received a similar number of requests for call-backs from businesses.

In total ANZ had received around 11,500 call back requests relating to Covid-19 since launching the online forms last Friday.

'Customers are requesting a call back for a range of reasons including asking for a home loan deferral, choosing to move to interest only, extending their loan term, or to discuss their business,' she said.

Kiwibank's total number of Covid-19 related enquires had risen to around 9000 by late Friday.

'For personal banking, we've now received 4600 requests from customers requiring home loan assistance,' said spokesman Tony Reid.

Kiwibank had also been working closely with many small businesses struggling during the lockdown, but these were all outside of the Government-guaranteed loan scheme.

'We're now providing assistance to just over 800 business customers impacted by Covid-19, in the form of loan payment deferrals, interest only terms, and temporary overdraft facilities,' he said.

'We are starting to get expressions of interest for the Business Finance Guarantee Scheme, following Wednesday's announcements,' Reid said.

'Customers should continue to check our website for details and to register their interest, so that our business banking team can provide them with any support that we can.'