Wednesday, March 18, 2009
CBA homeloan repayment deferrals
The Australian reports that the Commonwealth Bank of Australia has announced deferrals of up to 12 months on repayments for homeowners who lose their jobs. This may cushion the economy from short-term increases in unemployment by preventing customers from falling into arrears on payments and being forced to sell their homes (I have posted on this previously). If, however, house prices fall regardless, eligible homeowners who experience an extended (ie beyond 1 year) period of unemployment may find themselves worse off, as they will be forced to sell in a depressed market, with the interest capitalized on the loan.