Mortgage holders for ANZ, the Commonwealth Bank of Australia, National Australia Bank and Westpac, are eligible for concessions on their car loans, and a break from mortgage repayments for up to 12 months, depending on individual conditions.
It is hoped the plan will ease the volatility that arises from rising unemployment, something many anticipate will come over the next couple of years.
Mortgage repayments can be reduced, or suspended, for up to 12 months, as can car and other personal loans.
The top 4 banks are reported as controlling about 80 per cent of the Australian mortgage market.
Prime Minister Kevin Rudd said in a speech: "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 Government’s purpose in its negotiations with the banks has been clear – to ask the banks to provide maximum flexibility for borrowers suffering temporary hardship through enforced unemployment"
Mr Rudd made the announcement in Melbourne’s working class suburb of Narre Warren today.
But Opposition’s treasury spokesman Joe Hockey told Channel Ten the news is 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 said 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.