The Reserve Bank has extended the mortgage deferral scheme – but it comes with a warning to borrowers.
The extension means banks can continue to offer temporary mortgage deferrals to their customers, without those loans being viewed as being in default.
However, Reserve Bank Deputy Governor and General Manager of Financial Stability Geoff Bascand urges customers to consider their long-term interests when considering taking up the scheme.
“Borrowers should be aware that interest will continue to accrue on their loan during a deferral, potentially prolonging the repayment period,” he says.
“We recommend that customers considering extending, or applying for a deferral, contact their banks to discuss the best solution for them.”
Banks too are asked to take their customers’ situations into account when deciding whether to offer an extension.
Bascand says if a lender thinks it unlikely