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Deferral scheme extended to March

The Reserve Bank has confirmed the mortgage deferral scheme will be extended until March next year following the second lockdown in Auckland. 

Monday, August 17th 2020, 3:22PM

Geoff Bascand

The scheme was due to expire on September 27, but has been extended by more than six months amid the return of Covid-19 to the community and recent outbreak in Auckland. 

The extension applies to borrowers already on the scheme, and new applicants.

Deputy governor Geoff Bascand confirmed the central bank had given guidance to allow lenders to offer temporary deferrals, "without those loans being viewed in default". 

The extended scheme runs to March 31.

After the scheme ends, banks will still be allowed to offer deferrals to borrowers, but those loans "will not have the same concessionary regulatory treatment", the RBNZ said.

Bascand called on lenders to consider borrowers' long-term interests when reviewing deferral extensions and new requests.

“For many borrowers, resuming, or continuing payments in some form will be the most suitable approach, rather than taking up a deferral of their loan payments. A deferral should not be the default setting and it will be up to individual lenders to decide whether to offer one to their customers.”

The central bank said lenders should consider "hardship arrangements" with customers, "where the lender considers there is little reasonable prospect that the borrower will be able to resume payments once the deferral ends".

Banks have responded to the news. 

Westpac GM for consumer banking and wealth Gina Dellabarca expects many customers to come off the original deferral scheme.

"One in five home loan customers who sought this assistance have now resumed payments and we expect this number to grow. Many others will roll off support after six months and restart their repayments then.

“However, for those customers on deferrals who require continued support, we will have a range of options available including extending the term of their loan and switching to interest-only payments," she added.

Tags: Lending mortgages RBNZ

« Advisers ready for extended lockdownNegative OCR on the way: ASB and ANZ »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 ▼2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

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