Australian banks agree to help borrowers

CANBERRA - Australian retail banks, building societies and credit unions have signed up to a set of "principles" to help borrowers with financial troubles in tough economic times.

Federal Treasurer Wayne Swan said yesterday that all 144 retail banks, building societies and credit unions had joined the country's big four banks in the Government's "principles" to help borrowers.

"The principles provide support and assistance for borrowers struggling to meet their mortgage repayments due to temporary unemployment or other factors related to the global recession," Swan said.

"While Australia is weathering the global recession better than most countries, we are not immune to its impacts, including an expected rise in unemployment."

The Government had made an agreement with ANZ, Commonwealth Bank of Australia, National Australia Bank and Westpac in April to sign up to these principles.

All members of the Association of Building Societies and Credit Unions and all retail members of the Australian Bankers Association with a focus in the mortgage market are now signatories to the principles.

This agreement means that financial institutions will be able to offer a range of options to assist mortgagees who are facing financial hardship.

These options include postponement of mortgage payments for up to 12 months, a reduction in the amount of each payment due under the contract, interest-only breaks on loan repayments and fee waivers.

- AAP