Mortgage holidays are a popular option for homeowners in the wake of Covid-19. Photo / File
Mortgage holidays are a popular option for homeowners in the wake of Covid-19. Photo / File
About 1000 homeowners in the Bay of Plenty have applied to one major New Zealand bank for a mortgage holiday or reduction as a result of the Covid-19 crisis.
And nationally, more than 85,000 loans worth more than $30 billion have been reduced or deferred in the past month.
Westpacsaid figures showed that many customers in the Bay had been hit hard by the Covid-19 pandemic.
'We're doing all we can to support them,'' a spokesman for the bank said.
"As of Monday, we have processed approximately 1000 requests for a mortgage repayment deferral or reduction in the region and about 14,000 nationwide.''
Taking a loan repayment deferral or reduction will provide temporary relief for customers suffering financially from Covid-19, he said.
''However, it will add to the interest payable over the term of the loan. For that reason, we don't recommend customers apply for a deferral if they are able to continue making repayments.''
It expected most of its customers would be able to resume making repayments within the six-month period.
''But any customer who is unable to do so should contact us and we will continue to look for ways to support them.''
Other banks approached by NZME were unable to provide a regional breakdown of how many people had requested home loan deferrals but were able to provide information on requests at a national level.
Kiwibank external communications manager Kara Tait said it had fielded more than 13,000 inquiries related to Covid-19 nationally that included 5500 requests from customers requiring home loan assistance.
ANZ External Communications Corporate Affairs senior manager Stefan Herrick said the bank granted more than 17,000 home loan deferrals and received about 14,000 call-back requests to discuss personal lending.
If customers' circumstances meant they were struggling to repay their loan beyond the repayment deferral period, ANZ would consider options under the grounds of financial hardship, he said.
Nationally more than 85,000 loans worth more than $30 billion had been reduced or deffered in the last month. Photo / Getty Images
A BNZ spokesman said a deferment on repayments needed to be considered carefully, as interest would continue to accrue during the time payments were not being made.
It had processed around 10,000 applications nationally for a deferral or interest-only period.
The news comes hard on the heels of national figures which shows payments on more than 85,000 loans valued at more than $30 billion have been reduced or deferred in the last month.
On Monday the New Zealand Bankers' Association released aggregated data on how many customers had cut repayments or had their payments deferred altogether.
Sometimes described as a 'mortgage holiday', a Government-approved scheme enables banks to allow customers to reduce or suspend mortgage repayments for up to six months but interest on the loans continues to accrue.
Data shows across NZBAs membership, payments had been lowered on 43,962 loans worth $15.4 billion, while repayments had been deferred entirely on 42,212 loans worth $15.5b.
The NZBA has 17 banks as members, including the four major Australian-owned banks, as well as Kiwibank, SBS, Co-operative and TSB.
Chief executive Roger Beaumont said this was a stressful time for many people and the Covid-19 pandemic and the associated economic crisis was unprecedented.
''Our banks are very strong and ready to play their part to help us get through. We have plenty of cash and strong capital reserves.''
That meant the banking system could do what it was supposed to do in an economic crisis – cushion the impact for us all, he said.
''Banks do that by continuing to lend to households and businesses, and providing debt relief such as interest-only loans, and temporarily deferring all loan repayments for people with immediate need."
Banks were always willing to help customers who found themselves in hardship and the sooner customers told their bank about their situation, the easier it would be for them to provide practical options to assist you, he said.
Tauranga Budget Advisory Service manager Shirley McCombe said the mortgage holidays were an excellent idea for many families who spent a large chunk of their income on mortgage payments.
"We need people to come through Covid-19 with as few 'bruises' as possible. Hopefully, this facility means that no one will lose their home as a result of the lockdown.''
But it was important people understood that they were delaying the repayment of their mortgage and there wash a cost to that, she said.
''Make sure you fully understand the impact and what you can do to offset any additional costs. Knowledge is power.''
