It has been announced that the government, retail banks and the Reserve Bank have developed a financial support package to help homeowners and businesses affected by the economic impacts of COVID-19.
The package includes:
- A 6-month interest and principal holiday for mortgage holders and small- to medium-sized entities (SMEs) whose incomes have been impacted by the pandemic. This is to help safeguard against New Zealanders losing their homes as a result of the crisis.
- A $6.25 billion ‘Business Finance Guarantee Scheme’ providing short-term credit for SMEs designed to protect jobs and support the New Zealand economy.
The package will apply to businesses with annual turnover of between $250,000 and $80 million. The loans will be limited to $500,000 for a maximum period of three years.
If you have been affected by Covid-19, you can apply for a six-month mortgage holiday from Monday 30th March 2020 onwards. This will significantly take the pressure off homeowners for the next few months who are worried about losing their homes. You will not be required to make any payment towards your mortgage for the six-month period. It’s a good option for homeowners if they lose their job or are having cash flow issues due to the pandemic. However, it is important to note that your mortgage balance will be significantly higher at the end of the holiday period as interest will be added to your mortgage during the holiday period. The Government is still in the process of finalising the details.