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How CBA's new 1.99% green variable home loan compares to the competition

How CBA's new 1.99% green variable home loan compares to the competition

CBA has announced it will be the first big bank in Australia to offer a ‘green’ home loan, with rates starting from 1.99 per cent.

To qualify for the loan, customers must either have a certified Green Building Council of Australia (GBCA) Green Star Home, or meet a list of criteria including having a Nationwide House Energy Rating Scheme of 7 stars or greater.

Borrowers must be owner-occupiers paying principal and interest with at least a 20 per cent deposit to qualify for the 1.99 per cent rate.

Investors and borrowers with smaller deposits can apply, however, their interest rates will be determined on application.

Analysis of the RateCity.com.au database shows there are seven lenders offering green mortgages, with interest rates starting at low as 1.88 per cent.

Green home loans on offer for owner-occupiers

LenderProductLowest variable rateMax loan amountCriteria
CBAGreen Home Offer


NoneEither certified by the Green Building Council of Australia (GBCA) or a NatHERS rating of 7+ stars, plus other sustainability requirements.
Bank AustraliaEco Plus Variable


Not specifiedNatHERS certificate with a minimum 7.5-star rating + solar panels of at least 3KW in size or a Green Star Home certification.
FirstmacGreen Basic Home Loan


$2 millionNatHERS certificate with a minimum 7 -star rating. Only homes built in the past 12 mths.
Gateway BankGreen Plus Home Loan


$2 millionMinimum 7-star NatHERS or Residency Efficiency Scorecard certification.
loans.com.auGreen Home Loan


$2 millionNatHERS certificate with a minimum 7-star rating. Only homes built in the past 12 mths.
Regional Australia BankSustainable Home Loan


Not specifiedMust pass the minimum environmental standards required by the relevant state or territory authority plus additional measures.
Summerland Credit UnionEco Home Loan


Not specifiedEvidence of compliance with state-based environmental planning standards (e.g., Basix) dated 2017 or newer, plus additional sustainable features.

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. Loan-to-value requirements apply.

RateCity.com.au research director, Sally Tindall, said: “This is a positive and important step from Australia’s biggest bank. Offering an ongoing incentive for building a green home is the right thing to do.”

“CBA is rewarding its environmentally conscious customers with a sub-2 per cent rate and while variable rates are set to rise, the discount will remain for the life of the loan.

“This is the lowest ongoing advertised variable rate we’ve ever seen from CBA. However, most borrowers are unlikely to meet the purposefully meticulous criteria.

“This product is primarily designed for new builds and renovations, and as such, the initial uptake will be limited. However, with more Australians focused on building sustainable homes, the appetite for these loans will hopefully grow over time.

“The green home loan space has had a slow start in Australia, but with CBA now in the game, more lenders are likely to follow,” she said.

CBA owner-occupier variable rates – for customers paying principal and interest

Variable loanLowest advertised rateOther
Extra Home Loan (70% LVR)2.19%No offset, no ongoing fees
Extra Home Loan (80% LVR)2.29%No offset, no ongoing fees
Green Home Offer (80% LVR)1.99%Offset account, annual fee of $395
Discounted variable home loan3.85%Offset account, annual fee of $395

Source: RateCity.com.au

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This article was reviewed by Head of Public Relations Laine Gordon before it was published as part of RateCity's Fact Check process.



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