Households and businesses are being told support options are available as repayments rise
The Australian Banking Association (ABA) has called on customers experiencing financial difficulty to contact their bank, saying lenders have a range of measures available to assist those struggling with higher repayments and cost pressures.
"Australian banks recognise that this week's interest rate rise will be difficult news for many households and businesses," said Simon Birmingham (pictured top), chief executive of the Australian Banking Association. "We know that for some households, cost-of-living pressures and higher repayments are creating a real squeeze on their budgets.
"Banks also understand that many businesses are facing financial pain amid the current global uncertainty which has led to higher fuel costs and supply chain disruptions.
"Whether you are a household or a business under financial pressure right now, you don't have to tough it out on your own – get in touch with your bank."
Birmingham noted that specialist teams are in place at banks nationwide to assist customers facing challenges including higher loan repayments, cost pressures, and supply chain disruptions.
He also pointed to continued deposit growth and high rates of borrowers ahead on repayments as indicators of household resilience built over recent years.
"Despite the current economic headwinds, data shows over 80% of mortgage holders are still ahead on their loan repayments and household deposits remain at record levels," the bank executive said. "While many households remain in a relatively strong position in terms of repayments, financial situations can change quickly, and banks stand ready to support all their customers during these uncertain times."
Support options available to customers will vary depending on individual circumstances but may include switching to interest-only repayments for a set period, temporary deferral of payments, reduction or waiver of fees for those in hardship, loan term restructuring to reduce monthly obligations, flexible access to savings or term deposit products to address short-term cash flow needs, and emergency credit limit increases or temporary overdrafts.
Customers experiencing difficulty are encouraged to contact their lender directly to discuss what assistance may be available to them.
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