Borrowers with Australia’s top four banks are eligible for repayment relief to deal with the Global Financial Crisis, prime minister Kevin Rudd announced today.
Concessions will apply on car loans, and home loans for up to 12 months, depending on specific conditions.
It is hoped the plan will ease the volatility which could stem from a spike in unemployment.
The jobless rate is already forecast to rise over the next couple of years.
Mr Rudd added repayments can be reduced or suspended.
The four banks – ANZ, Commonwealth, National Australia and Westpac – are reported to control about 80 per cent of the national mortgage market.
“Whether you’re a banker or a battler, it’s in every Australian’s interest that we pull together because that’s the only way we will see the nation through these tough conditions,,” the politician said.
“The government’s purpose in its negotiations…has been clear – to ask the banks to provide maximum flexibility for borrowers suffering temporary hardship through enforced unemployment”.
Mr Rudd announced the initiative in Melbourne’s Narre Warren today.
Opposition’s treasury spokesman Joe Hockey told Channel Ten the news is welcome – but old.
“This announcement today, about the mortgage relief for people who are unemployed, it’s a good initiative and we welcome it, but it was announced two weeks ago”.
The Consumer Action Law Centre’s Carolyn Bond added people already have a legal right to get help from a bank.
“You do have rights and if you actually do think that a hardship variation will help you repay not just a mortgage, but a car loan or even a credit card, you should be asking for it and know that you can probably enforce that if necessary,” she told the ABC.