05 Aug 2020

Victorians soldier on despite COVID-19 lockdown

Non-bank lender Firstmac has released a new analysis of its $12.6 billion loan book which shows that the number of homeowners on COVID-19 hardship arrangements continues to fall steadily despite the flare-up in Victoria. 

Managing Director Kim Cannon said the percentage of mortgage holders on fully or partially suspended repayments due to COVID-19 hardship had dropped to 5.1% on July 31, from 5.37% at June 30 and 5.65% on May 31. 

“The number of borrowers needing hardship arrangements has fallen steadily from mid-June and is now about 10 per cent down from its peak,” Mr Cannon said. 

“There are some new cases each day, but for each new borrower coming onto hardship about two are resuming normal repayments.” 

Firstmac Portfolio Summary 

  

30/06/2020 

31/07/2020 

Total Balance 

$12.737 bln 

$12.589 bln 

Gross Arrears ((incl'd COVID) 30+ 

2.86% 

3.21% 

less COVID Arrears 30+ 

2.45% 

2.79% 

Net Reported Arrears 30+ 

0.40% 

0.42% 

COVID Arrangement (partial suspension) 

2.56% 

2.52% 

COVID Hardship (full suspension) 

2.81% 

2.58% 

Total COVID impacted borrowers 

5.37% 

5.10% 

All state exposures improved except for Western Australia and the Northern Territory which were both largely unchanged. Interestingly, Victorians have been consistently less likely to apply for hardship than NSW residents over the past three months.  

The number of Victorians on hardship arrangements even fell during July despite a Stage 3 lockdown applying throughout the month. 

On May 31, the number of Victorians on hardship arrangements was 5.82%, which fell to 5.63% at June 30, and 5.37% at July 31. 

Mr Cannon said that Firstmac continued to monitor the Victorian situation closely as the state entered Stage 4 lockdown. 

“These are challenging times, but we are optimistic because our Victorian data shows that communities around Australia are adapting and learning to live with COVID-19,” Mr Cannon said. 

“Unfortunately, fresh outbreaks are going to happen from time to time for the foreseeable future, but most people are soldiering on with their plans and their lives.” 

Mr Cannon said Firstmac was able to examine its exposure to COVID-19 hardship right down to the postcode level and that this would yield valuable insights for the company and potentially even policymakers in the future. 

Over the past quarter, the monthly loan book updates from Firstmac have become a bellwether for investors in bank stocks and Residential Mortgage-backed Securities (RMBS). 

During July, there were $33.0 million worth of new COVID-19 hardship assistance requests from Firstmac borrowers, compared to a much larger $74.0 million in loans that moved out of COVID-19 hardship status. 

The COVID-19 affected loans that were 30+ days in arrears increased from 2.45% last month to 2.79% at July 31. 

Media contact: Duncan Macfarlane on 0434 184 264 

Firstmac Limited is an independently-owned, Australian financial services provider with more than four decades of experience in home and investment loans. Firstmac has written more than 130,000 home loans and manages approximately $12.6 billion in mortgages and $300 million in cash investments. Firstmac is a premier sponsor of the Brisbane Broncos.

Victoria bucks national trend of falling COVID-19 hardship

Non-bank lender Firstmac has released a new analysis of its $12 billion loan book which shows that the number of homeowners on COVID-19 hardship arrangements is rising in Victoria, against a backdrop of falling hardship in other states.   

Managing Director Kim Cannon said that the Victorian lockdown was predictably causing increased financial hardship among Victorians, and especially business owners and the self-employed

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