Bankers Association chief executive Roger Beaumont warned anyone thinking of taking the mortgage holiday to carefully consider its costs, as interest would still accrue over the six months.

New Zealand’s retail banks are offering to defer repayments for all residential mortgages for up to six months for customers financially affected by Covid-19.

“We know that some customers are already being financially impacted by Covid-19 and have an immediate need. That’s why the banking industry as a whole is stepping up with this further package,” says New Zealand Bankers’ Association chief executive Roger Beaumont.

Mortgage repayment deferrals mean that affected customers who apply to their bank will not make principal and interest payments on their loans for up to six months. This package is in addition to what banks are already doing individually to provide assistance to affected customers.

“Anyone opting into a mortgage deferral needs to be clear about what this means for them. While there are obvious advantages for people in need, repayment deferrals may extend the time it takes to repay the loan and will add interest cost. So it may not be for everyone.

“It’s important to know that interest on these loans will still accrue, and deferred interest will be added to the principal amount of the loan.

“Banks will assess the suitability for each customer who is asking for a deferral.

“Banks will have different approaches to how they manage the process for customers to opt into a mortgage deferral. Those details, including eligibility criteria, will be available on bank websites.

“Importantly, we’d like to acknowledge the government’s support for this package. At such an extraordinary time we must all stand together to get through this unprecedented challenge to New Zealand,” Beaumont says.

ENDS

“Banks will have different approaches to how they manage the process for customers to opt into a mortgage deferral – those details, including eligibility criteria, will be available on bank websites.”

“It’s important to know that interest on these loans will still accrue, and deferred interest will be added to the principal amount of the loan.”

“Anyone opting into a mortgage deferral needs to be clear about what this means for them. While there are obvious advantages for people in need, repayment deferrals may extend the time it takes to repay the loan and will add interest cost. So it may not be for everyone.”

“We know that some customers are already being financially impacted by Covid-19 and have an immediate need. That’s why the banking industry as a whole is stepping up with this further package.”

Bankers Association chief executive Roger Beaumont said the banks can now offer to defer mortgage payments of principal and interest for up to six months.

All key banking services will remain available to customers during the alert level 4 lockdown the New Zealand Bankers’ Association confirmed today.

“During the lockdown banks will balance managing public health requirements with the need to keep essential banking services available,” says New Zealand Bankers’ Association chief executive Roger Beaumont.

“Cash will be available at ATMs, payments systems will function as usual, and financial advice and credit applications will be available.

“You will still be able to conduct banking online or on the phone.

“To help combat Covid-19 most bank branches will be closed from Thursday as the lockdown takes effect. During the lockdown banks will keep some branches open for limited hours one day a week to meet the needs of customers who cannot use ATMs, phone or online banking. This is necessary in the circumstances and subject to review.

“At this time we ask that customers do not visit a bank branch unless absolutely necessary.

“We encourage any customers who are unable to use ATMs or internet banking to call their bank to talk through their needs.

“There will be limited operations at contact centres, so please be patient when phoning your bank’s 0800 number if you cannot bank any other way.

“We encourage people to contact their neighbours to check in on their needs and help them where possible. That might include helping them talk to their bank. Please remember not to give your cards and security details to others.”

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From Thursday, banks will keep some branches open for limited hours one day a week for customers who could not use ATMs, phone or online banking, said New Zealand Bankers’ Association chief executive Roger Beaumont.

The Bankers’ Association urged customers to speak to banks early and said support options included reducing or suspending repayments of home loan debt and instead only repaying the interest on the loan.