Small businesses will get a six-month break from making repayments on their loans under a coronavirus relief package announced by the banks on Friday.

But interest will continue to mount during the payment holiday, adding to the amount eventually due when the crisis lifts.

And there is as yet no relief for home mortgage customers unable to make payments because the pandemic has cost them their jobs, although the Australian Banking Association chief executive, Anna Bligh, said banks were closely monitoring the situation.

“If we start to see any similar critical need in other parts of the community – including mortgages – that is something that they know they will have to look at,” she said.

She said banks were not yet seeing signs of widespread mortgage distress.

“What they are seeing is a rapidly and exponentially growing volume of calls from small business in distress,” she said.

The move by the banks, which will kick in as early as Monday, follows the Australian central bank’s decision on Thursday to give lenders access to a $90bn line of credit, at rock-bottom interest rates, to be used to make loans to the small business sector.

Prudential regulator Apra also told banks that now was the time to spend capital they have squirrelled away for a rainy day.

As Guardian Australia reported on Wednesday, small businesses face a crisis in paying their rent within weeks due to plummeting revenue.

Those in hospitality and events, which are among the first sectors to be smashed by bans on travel and gatherings and a move among corporate Australia to have staff work from home, have already begun laying people off.

Unions say this could in turn lead to a housing crisis in coming days as people fail to pay their rent or mortgage payments.

Adding to pressure on household finances, Qantas on Thursday became the first big corporate to cut staff loose because of the virus crisis, standing down without pay 20,000 of its 30,000 staff.

These staff will be able to draw on their accrued leave entitlements, but the airline’s CEO, Alan Joyce, has admitted many will soon be left without any income.

Small businesses will be able to get access to the payment deferral scheme by registering with their bank, Bligh said.

She said the scheme covered $100bn of existing loans.

“It delivers up to $8bn back into the pockets of small businesses as they battle with this virus and its impacts on their business,” she said.

She said banks were also willing to lend more money to small businesses that had capacity to repay.

“There is money there to lend to those who can take on more debt,” she said.

The new package comes on top of previous measures by the banks to support small business, including slashing loan rates and offering fee waivers.

The Australian Competition and Consumer Commission chairman, Rod Sims, waved the package through on Friday.

“We consider that this relief package will enable banks to quickly provide relief to impacted businesses, and allow them to keep employing their staff,” Sims said.

“Importantly, interim authorisation does not mean that individual banks can’t decide to offer more favourable and tailored terms to their small business customers experiencing financial hardship during these times.”