Managing Director Kim Cannon said the data confirmed there was good news on COVID-19 hardship across the country.

“We are pleased to report that the slow but steady improvement that started in June has continued, showing that the trend back to normality is being sustained,” Mr Cannon said.

“Surprisingly, given the Stage 4 lockdown, this improving trend now also includes Victorian borrowers despite an earlier uptick in August due to their Stage 4 lockdown.”

The Firstmac data shows that the number of Victorian borrowers on hardship arrangements has fallen from 5.54% on August 31, to 4.66% on September 30.

Nationwide, the national percentage of mortgage holders on fully or partially-suspended repayments due to COVID-19 hardship was 3.79% at 30 September, down from the national figure of 4.84% on 31 August,and well below its peak in mid-June of 5.71%.

COVID-19 Hardship by State:

ACT SA QLD TAS WA NSW VIC
31/08/2020* 2.14 3.48 4.21 4.34 4.46 5.18 5.54
30/09/2020 1.73 2.55 3.12 2.54 3.79 3.82 4.66

*revised

Of the 3.79% of borrowers on COVID-19 hardship arrangements, only 61% were 30+ days in arrears, despite the pandemic now entering its seventh month. This low figure is because many of these accounts were in advance before the pandemic started, or they have continued to make partial repayments, meaning they have not fallen 30-plus days behind.

Of the homeowners on hardship arrangements, 57% are making partial repayments. This represents a steady increase, up from 43% in May.

In the month of September, Firstmac received $18m of new Covid-19 hardship assistance requests, while $156m in loans moved out of COVID-19 hardship.

The analysis also revealed that the Government’s $200 billion Term Funding Facility, which lends public money to banks at super-low rates, while excluding non-bank lenders, has allowed the big banks to dangerously increase their market share.

Mr Cannon said that in September, Firstmac’s book was being refinanced away to the major banks at the pace at almost twice the pre-COVID-19 rate, due to the flood of government-subsidised cash.

“The TFF needs to be urgently reviewed to ensure that it doesn’t end up reducing competition in the market just when it needs to be protected,” Mr Cannon said.

“Non-bank lenders play a vital role in keeping the banks honest so weakening us is only going to hurt consumers when this crisis passes, as they all do.”

Media contact: Duncan Macfarlane on 0434 184 264

Firstmac Limited is an independently-owned, Australian financial services provider with more than 40 years’ experience in home and investment loans. Firstmac has written in excess of 130,000 home loans and manages approximately $12 billion in mortgages and $300 million in cash investments. Firstmac is a premier sponsor of the Brisbane Broncos.