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
|Lender||Product||Lowest variable rate||Max loan amount||Criteria|
|CBA||Green Home Offer|
|None||Either certified by the Green Building Council of Australia (GBCA) or a NatHERS rating of 7+ stars, plus other sustainability requirements.|
|Bank Australia||Eco Plus Variable|
|Not specified||NatHERS certificate with a minimum 7.5-star rating + solar panels of at least 3KW in size or a Green Star Home certification.|
|Firstmac||Green Basic Home Loan|
|$2 million||NatHERS certificate with a minimum 7 -star rating. Only homes built in the past 12 mths.|
|Gateway Bank||Green Plus Home Loan|
|$2 million||Minimum 7-star NatHERS or Residency Efficiency Scorecard certification.|
|loans.com.au||Green Home Loan|
|$2 million||NatHERS certificate with a minimum 7-star rating. Only homes built in the past 12 mths.|
|Regional Australia Bank||Sustainable Home Loan|
|Not specified||Must pass the minimum environmental standards required by the relevant state or territory authority plus additional measures.|
|Summerland Credit Union||Eco Home Loan|
|Not specified||Evidence 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 loan||Lowest advertised rate||Other|
|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 loan||3.85%||Offset account, annual fee of $395|