Customers impacted by the virus are being urged to ring their bank and ask about hardship policies, which may include a suspension of home loan payments for up to three months.
Australia's big four banks could be on the verge of offering mortgage "holidays" to customers placed into financial hardship by the coronavirus outbreak.
Repayments holidays, otherwise known as mortgage windows, could allow individuals to suspend payments in extreme circumstances if they are unable to work as a result of the virus.
The Royal Bank of Scotland (RBS) and Lloyds overnight introduced the scheme in the UK, telling customers that financial support was available to them.
Under the RBS model, individuals setback by the virus – such as those being forced to take unpaid sick leave – would be offered a temporary mortgage suspension as well as options to deliver cash fast such as increasing withdrawal limits.
It's a model that could be potentially adopted Down Under, says RateCity Research Director Sally Tindall.
"Banks typically provide customer support for anyone undergoing financial hardship at any given time," Ms Tindall told 9News.com.au.
"If someone is affected by coronavirus and experiencing financial difficulty as a result they can pick up the phone to their bank and discuss their options."
Ms Tindall said the recent Australian bushfire crisis has laid the groundwork for the major banks offering assistance packages to individuals.
"In the recent bushfires, some banks provided assistance to affected customers," Ms Tindall said.
"If the coronavirus continues to escalate, and it becomes difficult for people impacted by the virus to repay their loans, banks may start rolling out support packages to affected retail customers."
Several of Australia's big four banks have already begun rolling out COVID-19 assistance packages, but have stopped short of offering wide-scale mortgage repayment suspensions for retail customers.
The Commonwealth Bank said it encourages customers who have been financially damaged by the virus to get in touch for a tailored approach.
"We encourage our retail customers who may be facing hardship due to impacts of the virus to contact us so that we can provide them with assistance for example hardship options including deferral of loan repayments," CBA said in a statement.
"Customers can contact our Financial Assistance team for help."
Westpac has rolled out a number of measures to support business customers, including deferring business loan repayments by up to three months.
Other measures for business customers include deferred credit card payments, restructuring and consolidating loans and allowing access to term deposit funds without a reduction in interest rates.
NAB's Chief Customer Officer Anthony Healy also encouraged private customers to make contact with the bank if the virus was impacting their finances.
"A number of Australian businesses have already cited coronavirus as having an impact on earnings and we are determined to back our customers through this difficult time," Mr Healy said in a statement.
"We know that businesses' may have difficulty with cash flow in light of fewer tourists, a drop in university students numbers or forward orders in mining or agriculture.
"We are working with our customers on a case by case basis. Anyone who needs assistance should contact their banker so we can discuss their circumstances and determine the best way to help."
The most visible COVID-19 response has come from the Bank of Queensland, which has established a specialised coronavirus customer hotline for consumers affected by the virus.
Source: 9News https://www.9news.com.au/national/coronavirus-outbreak-australian-banks-may-offer-mortgage-repayment-suspensions-for-affected-customers/b4740965-4bfd-42bf-8811-4e9c44a6207e