Loan payment deferrals have seen a take-up rate of around 10 per cent according to the Reserve Bank, a point they highlighted at their May meeting.
On the flipside however, RBA governor Philip Lowe noted that there also plenty of borrowers maintaining payments and in excess of the minimum payment.
Mr Lowe said the struggling economy in the wake of the COVID-19 pandemic would dampen demand for borrowing for some time but the banking system in Australia remained strong.
“The banks are helping the economy traverse this difficult period,” he said in a statement.
“Banks had reduced housing interest rates to record lows.”
“Members observed that a large share of the monetary policy easing since May 2019 had been passed through to variable mortgage rates, and advertised fixed mortgage rates had declined even further over recent months.”
“Banks had also offered housing borrowers loan payment deferrals for up to six months.”
As for business borrowing, Mr Lowe said interest rates for businesses had also lowered significantly and there were also government initiatives to support lending to SMEs.
“Interest rates for small businesses had declined most and many of these businesses had been offered loan repayment deferrals for up to six months,” he said.
“Liaison with banks suggested that around 20 per cent of eligible businesses had taken up this option.”