Small financiers have joined the big four banks in extending mortgage holidays to borrowers who lose their jobs and income because of the global recession.

Credit unions, building societies and retail banks have promised to offer the reprieves, which allow struggling borrowers to delay mortgage payments by up to 12 months and decrease the size of instalments.

Families experiencing demonstrated hardship can apply for lenient treatment at 144 financial institutions.

The Commonwealth Bank, National Australia Bank, ANZ and Westpac signed up to the government program in April.

Borrowers who can prove financial hardship can postpone for up to 12 months the dates on which payments are due under a mortgage contract, extend the period of the contract and reduce the amount of each payment. They can also seek interest-only breaks on loan repayments as well as fee waivers.

The Australian Bankers’ Association said small banks signing up helped give borrowers the same access to help. “We would like to see all other lenders do the same,” the association’s chief executive David Bell said. Most applications for home repossession were not by banks but by other lenders, he said.

Analysts have predicted the big four banks will collectively make more than $16 billion profit this year. The jobless rate is forecast to reach 8.25 per cent.

Financial institutions retain the power to reject borrowers unable to repay loans in the longer term. Bank staff will be trained to funnel struggling borrowers to the appropriate services and treat such cases sensitively.