Brief History on all Banks, Building Societies, Home Loan Providers, and Credit Unions that Have Gone Broke in the Last 75 Years in Australia
It has historically been very difficult for financial institutions, such as banks, building societies, home loan providers, and credit unions to go broke in Australia due to the government stepping in to prevent a financial crisis. However, over the last 75 years, there have been periods of financial difficulty that have led to some big-name lenders closing up shop.
During the financial crisis of 2008, five Australian banks crashed due to rising interest rates, fewer Australians borrowing money, and an inability for these banks to repay their own loans.
This was the first time numerous big-name lenders closed their doors since the 1970s when Australians rushed to liquidate their money and assets. This “money run” caused several credit unions to go broke. During this time, a few building societies, including the financially-sound Hindmarsh Building Society in South Australia, also went broke.
While it’s possible for banks to go broke, it is very uncommon. If your home loan provider goes broke, your mortgage will be sold to another lender. The terms and balance on your loan will remain the same, but your interest rate may change. If your bank goes broke, the Australian government has insured your money up to a certain amount. As long as the amount in your account is less than the amount insured by the government, you will receive all the money in your accounts. If you have more money than the government-insured amount, you will receive only up to that amount.
At Mortgage House, we provide home loan solutions customised to your needs. We are one of the leading non-bank lenders and offer competitive loan terms and interest rates. Contact our loan specialists today to learn more about how we can help you.