“While Australian banks’ current asset quality is very strong, it will deteriorate significantly if disruptions persist for a prolonged period and push up the unemployment rate, which will lead to more impairments of residential mortgages, which comprise approximately two-thirds of banking system loans,” Moody’s stated (Kadib, 2020). According to the ratings agency, the outbreak is set to “increase the strain” on the banking sector’s operating environment and impair loan performance, with an increase in loan provisioning and record-low interest rates to squeeze bank margins (Kadib, 2020). This suggests that if the situation is prolonged it will cause difficulty in bank loan approval due to stricter credit checks.
Vast Capital’s Response
In Deliotte’s 2020 Australian Mortgage Report, Susan Mitchell from Mortgage Choice mentioned a “need to ensure we invest in the IT systems and process” (Deloitte Australia, 2020). We continue to provide a seamless mortgage solution, now attainable through our free 1:1 online consultation which can be booked directly on the Vast Capital Website. This is the solution to getting mortgage solutions for anywhere, even from home. We continue to use simple and quick internal credit checking methods so that we can provide low interest and flexible products during the pandemic.