Australia, April 6 – Australia’s four biggest banks will give people who have lost their job up to a year free of mortgage repayments. Home loan sector leaders Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corp. and the Australia and New Zealand Banking Group Ltd. will participate in the program.

Prime Minister Kevin Rudd said during an employment conference in Melbourne that the mortgage assistance plan would alleviate the “anxiety and fear” the jobless feel when faced with ongoing payments.

According to Rudd, banks will work with unemployed borrowers to negotiate possible payment postponement for up to one year, with interest payments to be capitalized back into the load. Banks will also consider extending the mortgage terms of home loans to reduce the size of individual loan payments under the contract. For car loans, on the other hand, banks may consider interest-only repayments and fee waivers.

The government’s negotiations with the banks aim to provide maximum flexibility to borrowers currently suffering employment hardships. Rudd also announced last Sunday the creation of a $650 million job fund aimed at employment, training and improving facilities in local communities.
The increased assistance comes after both Treasurer Wayne Swan and Treasury Secretary Ken Henry warned last week the government’s February forecast of a rise in unemployment to 7% by mid-2010 would be raised in the May 12 budget.

Source:
Online.wsj