Banks have frozen repayments on 14,500 home loans as a result of the latest round of lockdowns, highlighting the growing financial toll being inflicted by restrictions in NSW especially.

The Australian Banking Association (ABA) will on Friday release figures showing the number of home loans put on hold in response to Sydney’s escalating COVID-19 outbreak is much lower than the peak of last year’s crisis, but rising quickly as the lockdown drags on.

Last month, banks reinstated emergency support measures for struggling customers, including allowing people to have their home loan repayments temporarily put on hold.

The ABA’s data showed that in addition to the 14,500 mortgage deferrals granted since the 8th of July, payments on more than 600 business loans had also been deferred.

NSW accounted for more than 10,000 of the mortgage deferrals, and the number of struggling borrowers is likely to continue rising as the Greater Sydney lockdown continues.

ABA chief executive Anna Bligh said banks would also be closely monitoring the impact of the lockdown in Queensland, and the expansion of the Greater Sydney lockdown into the Hunter and Upper Hunter regions on Thursday.

“What the data tells us is that prolonged lockdowns result in financial difficulties for literally thousands of people,” Ms Bligh said.

Ms Bligh said borrowers could generally manage through lockdowns of two or three weeks. But when shutdowns were extended over a longer period of time, more people struggled, as they lacked sufficient buffers, such as savings.

Sydney borrowers dependent on construction activity had been especially hard hit, Ms Bligh said, noting that construction work had not been shut down in 2020.