Several non-major lenders have announced relief measures for consumers affected by the coronavirus outbreak, which include the suspension of mortgage repayments.
Following moves from the major banks, Macquarie, Bendigo and Adelaide Bank, Suncorp, ME and Heritage Bank have announced support packages for customers in response to the growing economic threat posed by the coronavirus (COVID-19) pandemic.
Members of the Australian Banking Association (ABA), Macquarie, Bendigo and Adelaide Bank, and Suncorp have committed to suspending small-business loan repayments for up to six months.
However, the lenders, along with ME Bank and Heritage Bank, have also announced a number of additional measures to support affected customers.
Macquarie has extended small-business loan repayment relief to all business and personal banking customers, which would include commercial loan, overdraft, home loan, car loan and credit card clients.
Further, in response to initiatives announced by the federal government and the Reserve Bank of Australia (RBA), Macquarie has repriced its product suite to reflect the lower cost of funding.
For business clients, the changes include:
- cutting interest rates by 100 bps for SMEs accessing equity in their homes for new loans, with no payment due for the first six months
- cutting interest rates by 100 bps for Smarter Business Loan customers
- cutting interest rates by 25 bps for other existing variable rate small-business customers
- cutting interest rates by a further 100 bps for commercial vehicle lending.
For home loan customers, Macquarie will:
- cut fixed rates for new home loans by 25 bps for one, two and three-year loan terms, with rates starting from 2.39 per cent.
Variable home loan rates will remain unchanged.
For deposit customers, changes include:
- increasing ongoing interest rate for everyday savers by 100 bps to 1.35 per cent for all balances up to $1 million
- increasing the Macquarie Cash Management Accelerator interest rate to 1.20 per cent
- increasing retail term deposit rates to 1.75 per cent for all three to 12-month term deposit products
- enabling customers will be able to access term deposit funds without a reduction in their interest rate.
“We’re committed to supporting Australian businesses and households through what we know is an uncertain time,” Macquarie said in a statement.
“We’re reaching out to our clients to let them know we’re here to continue supporting them throughout this difficult period.”
Bendigo and Adelaide Bank
In addition to providing business customers with the option to freeze their loan repayments for up to six months, Bendigo will extend its hardship arrangements to all customers affected by the virus.
The arrangements include:
- waiving fees for the restructuring or consolidation of loans;
- waiving interest rate reductions for early withdrawals on term deposits prior to maturity;
- waiving or deferring of fees and charges; and/or
- deferring of interest payments or term extensions.
“Many of our customers have already felt wide-ranging impacts from drought and bushfires, and the rapid emergence of COVID-19 has further exacerbated the need for individual assistance and a coordinated industry response,” Marnie Baker, managing director, Bendigo and Adelaide Bank, said.
“It is essential we provide our customers with the dedicated and necessary support they need to manage through these uncertain times.
“We have already been actively engaging our customers and our relationship managers are standing by to work closely with them on an individual basis during this challenging period.”
Suncorp Bank has announced a number of measures for personal and business banking customers affected by the pandemic.
For personal customers, Suncorp’s relief measures include:
- deferring loan repayments on a case-by-case basis for customers affected by the virus
- dropping fixed rate home loans to 2.29 per cent on two-year fixed and 2.49 per cent on three-year fixed rates
- offering 1.70 per cent term deposit rates between six to 12 months.
For business customers, Suncorp will:
- reduce the interest rate for existing Business Essentials variable loans to a maximum rate of 3.69 per cent for residentially secured lending and a maximum rate of 3.99 per cent for commercially secured lending
- remove all business account transaction and online international transfer fees on business deposit accounts from 3 April 2020
- lower the Small Business Overdraft and Small Business Line of Credit interest rates by 30 bps
- reduce the Business Essential base variable rate for new lending to small businesses by 30 bps and reducing fixed rates by 30 bps for commercially secured lending
Suncorp Bank CEO Lee Hatton said: “We’re keen for our customers to get as much help and support as they can from what is being offered by Suncorp Bank and the government.
“We know there are many messages of support and assistance being offered during this time – we’re here to help make this support simple and easy.”
ME Bank’s support package includes the following relief measures:
- fixed home loan rate cuts of up to 134 bps, with rates starting from 2.19 per cent (two-year fixed rates)
- increasing six- and 12-month term deposit rates to 1.80 per cent
- option to suspend home loan repayments for up to six months, with a review at three months
- providing automatic bonus interest rates of 1.8 per cent over the next three months for online savers who qualified for bonus interest in any of the last three months.
ME Bank has not reduced variable home loan rates.
ME CEO Jamie McPhee commented: “The coronavirus pandemic is unprecedented, and it is important for banks to work closely with people who have been impacted across the country.
“Our focus is clear: to provide support to customers when they need it most and today ME is announcing a range of measures to support both borrowers and savers.”
Heritage Bank’s support package for customers affected by the coronavirus includes: measures include:
- deferring scheduled loan repayments on a case-by-case basis
- waiving of fees associated with restructuring of loans, as needed
- waiving or refunding fees incurred because COVID-19 pandemic impacts have made it impossible for customers to meet requirements of their accounts (i.e. missed payments)
- early redemption on term deposits and farm deposit management accounts for customers impacted by the pandemic, without fees or penalties.
“We’re all in uncharted territory and facing circumstances we’ve never had to deal with before,” Heritage said in a statement.
“Now, more than ever before, we are committed to demonstrating our people-first approach as we respond to these unique circumstances.”
[Related: Big banks offer mortgage repayment relief]