The Commonwealth Bank of Australia (CBA) has reminded customers that it will be automatically reducing direct debit repayment amounts for all eligible variable principal and interest (P&I) home loan customers to their minimum repayment required.
The change, which will come into effect from next Friday (1 May), is being made “given the current uncertainty surrounding coronavirus” and as part of the bank’s steps to “continue providing the financial support [CBA] home loan customers need”.
As announced as part of its COVID-19 support package last month, CBA said the “one-off change” is aimed at “helping to put a little more cash in the pockets of our customers during these difficult times”, which could be then spent in the economy.
Speaking last month, CEO Matt Comyn said the move could help up to 730,000 customers by reducing repayments to the minimum required under their loan contract”, and “release up to $400 per month for customers and create up to $3.6 billion in additional cash support for the economy”.
Mr Comyn added: “Our home loan customers are on average 37 months ahead on their home loan repayments. Customers will be able to opt-out after the change is effective should they wish to keep their current repayments.”
The bank also revealed that 39 per cent of their home loan customers are more than 12 months ahead of repayments – with the vast proportion of this being two years ahead on their mortgage.
CBA said that the changes will take place between 1 and 5 May.
Customers wishing to retain or change their current repayments will be able to change their direct debit repayments via the CommBank app or NetBank from 6 May.
CBA added: “Please accept our reassurance that the decision was made with the best intentions, though we acknowledge that no one decision can suit everyone.”
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