Banks are encouraging customers to reach out early if they feel like they're going to struggle with meeting payments on time.
The call comes as banks notice an increasing number of cases where people haven't met payments on time.
Data shows while instances of missed mortgage payments is at a relatively low 1.7 per cent - compared with 1.9 per cent before the pandemic started - the trend started going back up in the first three months of 2024.
The Australian Banking Association (ABA) chief executive officer, Anna Bligh said financial institutions recognise that people are struggling with "difficult financial decisions in the current economic climate."
"People shouldn't feel like they need to navigate their finances on their own. If you feel like your finances are stretched or you're worried about your current financial position, please get in touch with your bank as soon as possible."
"The earlier people reach out to their bank, the easier and quicker it is for banks to put support options in place.
Banks may be able to assist by:
- lowering home loan or credit card loan payments
- restructuring the length of a loan
- moving a customer to interest-only payments for a while
- deferring payments for a period.
The ABA also has a Financial Assistance Hub for customers to easily and privately access support. It includes information for customers who are moving off fixed rate mortgages or struggling to repay 'buy now, pay later' loans, particularly in light of the interest rates climbing since 2022.
For more information, visit the ABA's Financial Assistance Hub homepage.
It follows a callout by the Australian Financial Complaints Authority that complaints involving financial difficulty, a category that includes disputes over hardship assistance, rose 25 per cent in 2023. Of the 5396 complaints, a third related to home loans.
