ME Bank has slashed the amount an estimated 20,000 customers can redraw from their home loans by thousands of dollars, drawing outrage from borrowers hoping to use the money during the coronavirus crisis.
A spokesman for the bank, which is owned by a group of industry super funds, said it made the move after figuring out that “the redraw facility of some legacy home loans could lead to some customers falling behind their original repayment schedules”.
Home loan redraw facilities allow borrowers to make extra mortgage payments and either use the money to pay off their loan quicker or draw down cash later on.
Customers who have flooded the bank’s Facebook page with complaints appeared to have been caught by surprise by the move.
“The money we lost is actually my husband’s redundancy payment as he was retrenched last week,” one customer, said in a post to the page last week.
The customer said her redraw limit had been slashed by “over $16,000”.
“We are not eligible for Centrelink payments and were relying on those funds to get us through,” she said.
Another said his limit had been slashed by $20,000 with “no notice”.
Home loan redraw facilities allow borrowers to make extra mortgage payments and either use the money to pay off their loan quicker or draw down cash later on.
Customers who have flooded the bank’s Facebook page with complaints appeared to have been caught by surprise by the move.
“The money we lost is actually my husband’s redundancy payment as he was retrenched last week,” one customer, said in a post to the page last week.
The customer said her redraw limit had been slashed by “over $16,000”.
“We are not eligible for Centrelink payments and were relying on those funds to get us through,” she said.
Another said his limit had been slashed by $20,000 with “no notice”.
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