02-May-2020 • Corporate
ME identified the redraw facility on some legacy home loans* could lead to some customers falling behind their original repayment schedules.
The redraw facility gives customers access to payments that they have made ahead of their repayment schedule.
By not reducing the available redraw amount over time, customers could overuse the redraw to a point where they could fall behind their original repayment schedule. This can put customers at risk of not meeting their repayment commitments, potentially leaving them open to financial hardship at the end of the loan term.
No money has been removed from customer accounts. The adjustment made is to the amount available for redraw.
We understand that the change has caused concern to some customers, particularly in the current environment.
We are reviewing the personal circumstances of each customer affected and are committed to working with them to determine how we can help with their individual financial needs. ME is in the process of contacting affected customers to see if any support is required and offering options such as:
- Rearranging financing at the Bank’s cost for customers whose redraw limits have been reduced
.
- Offer customers access to the three and six month repayment holidays.
We have made more of our team members available to provide this support, and we have extended our call centre hours.We are committed to working with every customer who needs our support.
* The change to the amount of redraw funds available only relates to a portion of legacy loans written more than five years ago.