Fears of mortgage struggles ahead

STRESSED Australian mortgage customers who paused their loans fear they won’t be able to start meeting their repayments again, new analysis shows.

Most mortgage repayment holidays are due to end next month, at the same time as the federal government’s JobKeeper program ends.

But new figures from financial services firm Mozo show about one in three mortgage customers who are receiving JobKeeper payments say the government payments are keeping them afloat.

Latest banking data reveals about 60,600 mortgages, 11,300 business loans and 6900 unsecured loans are on hold with the big four banks.

But the Mozo analysis based on a survey of 1300 Australians found:

• 24 per cent of customers with paused loans don’t believe they can meet repayments soon;

• 38 per cent are considering a switch to interest-only loans; • 30 per cent will struggle but will start repaying their loans.

Mozo spokeswoman Kirsty Lamont urged borrowers on repayment holidays to get in touch with lenders if they are concerned about being able to start paying again.

“We could be on the verge of some incredibly tough times for a lot of Australians as JobKeeper ends and people start coming off mortgage repayment holidays,” she said.

“It’s really important you are proactive and talk to your bank about your situation.

“The banks will have thousands of customers in this situation.”

Ms Lamont said banks would be determined to avoid customers having to sell their homes because they are unable to meet their repayments.

Many customers were given up to six months in payment deferral and for some this was extended by another four months.