Some Australians are cutting short their home loan deferrals as banks begin contacting customers, three months after the sector promised a freeze for those financially affected by COVID-19.

More than 485,000 mortgage customers with loans totalling $176 billion deferred their home loan repayments since major providers agreed to offer struggling customers a much-needed olive branch in March.

With the initial three-month period of deferrals now over, banks have begun a round of check-ins to see if customers can resume their repayments.

Although data on the success of this process will not be publicly available for at least two to three weeks, there are already positive signs.

An Australian Banking Association spokesperson told The New Daily while the banks are in the preliminary stages, they have seen a number of customers with a clearer financial outlook recommence payments.

“As agreed with APRA and the customer at the time the 6 month deferral period began, banks have commenced their 3 month check in calls to customers. Encouragingly, there is a percentage of customers who haven’t seen a major change in their income as a result of COVID-19. They are choosing to formally cease their deferral,” she said.

Nearly 5 per cent of ANZ customers recommence full payments

ANZ’s group executive of Australia retail and commercial Mark Hand said last week that roughly a third of customers who organised deferrals have since recommenced paying down their debts.

“Nearly 5 per cent are now back to making full payment,” Mr Hand said.

A Westpac spokesperson confirmed to The New Daily some of its roughly 120,000 customers who requested support have resumed repayments, and expects more to follow as “[we] review their circumstances [to] determine whether they can start making repayments again”.

A NAB spokesperson also told The New Daily several of its 80,000 home loan customers have restarted their mortgage payments since the check-in process began.

And a Commonwealth Bank spokesperson said the bank will provide additional assistance to customers on a “case-by-case basis”, and would extend customers’ loan terms to ensure their repayments do not increase because of the deferral.

As previously reported by The New Daily, interest accumulates through the deferral period, meaning the overall cost of a mortgage increases.

Banks eye off more assistance as September approaches

The Australian reported on Tuesday that APRA and major banks are considering plans to soften the so-called September “cliff”, which would be guided by information the banks collect through the check-in period.

Other options reportedly considered by the regulator include lengthening the term of loans (to lower or stabilise repayment costs), using redraw facilities and refinancing mortgages at lower rates.

CoreLogic property analyst Eliza Owen warned earlier this month that rising levels of household debt and increasing rates of unemployment could contribute to a wave of distressed sales if mortgage holders are unable to continue their repayments beyond September.

“If a large volume of distressed properties are listed simultaneously, this could put downward pressure on property values and make it harder to recoup equity from distressed sales,” Ms Owen wrote.

“APRA data suggests 60 per cent of bank loans and advances are in housing, so a decline in property values affects bank profits and capital.”