Non-banks offer payment holidays
Non-bank lenders Avanti Finance and Resimac will offer borrowers repayment reduction options and deferrals amid the Covid-19 crisis.
Tuesday, April 7th 2020, 3:27PM
The non-bank duo has also cut interest rates after the Reserve Bank's OCR cut last month.
Avanti has matched its banking peers by offering home loan customers payment reductions or deferrals for up to six months.
The option will allow customers to pause principal and interest payments, yet interest will accrue on the loans.
Avanti will also offer personal loan customers repayment reduction options and holidays for up to three months.
The company said the deferral options would be judged on a case-by-case basis, for those unable to make loan payments due to the Covid-19 outbreak.
"Despite not being part of the support package announced for banks, Avanti believes in doing the right thing for our mortgage customers and will extend the same assistance from today," Mark Mountcastle, CEO of Avanti Finance, said.
Mountcastle added: "We know some of our customers will be facing real financial challenges and we trust that this rate reduction along with our other Covid-19 related support will assist our customers at this time."
Avanti also announced a rate cut of 50 basis points for "long-term mortgage customers".
It comes after banks, the Reserve Bank, and the Government agreed joint action to offer customers financial assistance during the crisis.
There are ongoing discussions between non-bank lenders and the Government over relief options.
Meanwhile, Resimac is offering customers who have been affected by Covid-19 the chance to defer home loan payments by up to six months.
Resimac's Luke Jackson called on customers to talk options through with their adviser.
"The standard six months of deferred payments may not be the best solution for the borrower – many have found that switching to interest-only for a period, or opting for a shorter period of payment deferment, may better suit their situation and needs."
Resimac has cut its prime interest rates by up to 1.01%. Its variable rates for new business now start from 3.49% and two-year fixed rates start from 3.39%.
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