Temporary loan repayment deferrals due to COVID-19 - accessible version

Thursday 9 July 2020

Many authorised deposit-taking institutions (ADIs) have granted temporary relief to borrowers impacted by COVID-19, allowing them to defer loan repayments for a period of time. To provide greater transparency of loan repayment deferrals at the industry level, APRA is publishing the aggregated data obtained from Australia's 20 largest ADIs. 

Progressive total of loans subject to deferral: $266 billion of loans were subject to deferral at 31 May, representing 10% of total loans.

Monthly movements: $100 billion of loans were approved for deferral and $1 billion of loans were exited from deferrals in April 2020. $36 billion of loans were approved for deferral and $2 billion of loans were exited from deferrals in May 2020.

Proportion of total loans: At 30 Apr: Total loan deferrals – 8% of total loans, Housing loan deferrals – 9% of housing loans, Small business loan deferrals – 16% of small business loans. At 31 May: Total loan deferrals – 10% of total loans, Housing loan deferrals – 11% of housing loans, Small business loan deferrals – 18% of small business loans.

Number of loan facilities*: Total – 896,215 (5% of total facilities); Housing – 488,249 (9% of housing facilities); Small business – 227,292 (13% of small business facilities).

*The number of facilities does not necessarily indicate the number of borrowers as individual facilities with more than one repayment type may be reported more than once.

Housing loan risk profiles**

Deferred housing loans (percentage of housing loans)

• Loan to value ratio > 90 – 8%
• Interest-only – 14%
• Investor – 34%

Total housing loans (percentage of total loans)

• Loan to value ratio > 90% – 5%
• Interest-only – 18%
• Investor – 37%

**to give an indicator of potential elevated risk in loans subject to deferral this chart compares loans subject to deferral to total loans across three key cohorts - loan to value ratio of greater than 90 per cent, investor loans and interest only loans. 

Borrowers continuing to make repayments: At 30 Apr: Partial Repayments – 13%; Full Repayments 18%. At 31 May: Partial Repayments – 8%; Full Repayments – 12%

Data as at 31 May 2020, based on 20 largest ADIs by loan size.

Additional commentary

As at 31 May, data submitted by the 20 largest ADIs indicates that $266 billion worth of loans have been granted temporary repayment deferrals, which is close to 10 per cent of total loans outstanding. Housing loans make up the majority of total loans granted repayment deferrals, although small business loans have a higher incidence of repayment deferral with 18 per cent of small business loans subject to repayment deferral, compared with 11 per cent of housing loans. 

The rate of increase in loans now subject to repayment deferrals between April and May has slowed as applications reduced in May and some ADIs continue to work through processing high volumes of applications received in April. The pace at which loans become subject to repayment deferrals will be dependent upon a number of factors. The reduction from April to May does not necessarily indicate a trend.

The temporary repayment deferral programs were implemented within tight timeframes and the data has been submitted to APRA on a best endeavours basis. As ADIs improve their ability to capture these data items, resubmissions are expected. APRA will continue to publish this aggregate information on a monthly basis until loans subject to repayment deferrals are no longer a notable component of the ADI industry’s total loan portfolio.