Federal Treasurer, Wayne Swan, has announced that all 144 banks and credit lenders around Australia have agreed to assist Australian’s struggling to pay their mortgage.
By signing up to the government’s recent “Principles to assist borrowers who are experiencing financial difficulty as a result of the global recession”, lenders are committing to easing the mortgage burden of Australians.
The government and the banks have been working together to help ease the stress on Australia’s citizens, struggling under the relative stress of the current financial crisis. While Australia’s economic health on the wake of the Global Financial Downturn has been not as bad as first anticipated, many Australians are still hurting, with the unemployment rate hovering around 6%.
With this in mind, Treasurer Swan has outlined a set of principles that will allow banks to use discretion to apply leniency to customers struggling to meet their mortgage repayments.
The Treasurer’s plan specifically outlines:
· in relation to mortgages, postponing for up to 12 months the dates on which payments are due under the contract (with interest to be capitalised into the loan)
· extending the period of the contract and reducing the amount of each payment due under the contract
· reducing the limit available to customers on credit contracts;
· short-term reductions in interest rates, or repayments due under the contract
· offering different financial arrangements that will better suit the customer’s needs
· temporary overdrafts on a one-off and temporary basis to suit short-term needs
· providing interest-only repayment options on loans; and
· providing fee waivers
The banks have systems in place to identify borrowers in hardship but if any customers’ feel they have been unfairly done by, they can first lodge a complaint with their specific bank’s customer service department. If the customer still feels mistreated, they can get in touch with the financial ombudsmen.
For information on the new mortgage assistance principles, tailored information suited to your own financial situation and information on where you can get assistance, visit FIDO.gov.au.