Help the environment and get cash back, thanks to this bank

Help the environment and get cash back, thanks to this bank

Some mortgage holders could be rewarded for taking up “green” initiatives like installing solar panels on their home, thanks to this big four bank.

Commonwealth Bank (CBA) have introduced a new rewards scheme for energy efficient homes, including cashback offers for mortgage holders who install solar panels.

CBA Chief Executive Officer Matt Comyn, said CBA is seeing “strong investor demand for green bonds and plans to pass on the benefits of this to customers in the future through a variety of initiatives, including cashback offers to CBA mortgage holders who have solar panels installed.”

The Green Mortgage initiative will provide a $500 cashback to customers who have certified solar panels installed.

Commonwealth Bank’s Executive General Manager Home Buying, Daniel Huggins, also said CBA is “committed to developing more innovative solutions to help those customers who are looking for green, energy efficient opportunities.”

“We are always looking for innovative ways to support our customers, which is why we are launching this new initiative.

“We understand many of our home loan customers could reduce their energy volume and usage and pay less or become net positive for energy by investing in energy efficient devices.

“We want to support more of our customers who wish to install small scale renewables by reducing their installation costs and payback periods,” Mr Huggins said.

According to the RateCity database, there are currently 12 lenders who provide green loans, including car loans, personal loans and home loans.

This allows customers financing for solar panel loans, as well as loans for hybrid or electric cars.

Some lenders, such as Summerland, provide home loans for customers committed to making some environmentally-friendly additions; like water treatment/recycling, rainwater talks, roof insulation or energy efficient glazing and awnings. They’ll also make a charitable donation of 25 per cent of their establishment fee to an environmentally focused organisation.

However, keep in mind any fees or extra costs associated with these loans. You can check whether the loan repayments will suit your financial needs and budget by utilising RateCiy’s loan repayment calculator. 

Companies offering green loans

Company

Product Name

Loan Type

Bank Australia

Carbon Offset Car Loan

Car Loan

Bank First

Discounted Green Car Loan

Car Loan

Bank First

Green Car Loan

Car Loan

Bank First

Green Car Loan Fixed

Car Loan

Bank First

Green Car Loan Fixed (Special)

Car Loan

Bank First

Green Personal Loan

Personal Loan

Bank First

Green Personal Loan Fixed

Personal Loan

Bendigo Bank

Green Home Loan

Home Loan

Community First Credit Union

Green Loan

Personal Loan

Community First Credit Union

Solar Loan

Personal Loan

First Option Bank

BeGreen Loan

Personal Loan

Horizon Credit Union

Environmental Loan

Personal Loan

Hunter United

Green Home Loan

Home Loan

Hunter United

Green Investment Loan

Home Loan

Hunter United

Green Home Improvement Loan Only

Personal Loan

Police Bank

Green Loan

Personal Loan

Police Credit Union

Solar Eco Loan

Personal Loan

Regional Australia Bank

Enviro Loan

Personal Loan

Southern Cross Credit Union

Green Personal Loan

Personal Loan

Summerland Credit Union

Eco Home Loan

Home Loan

Summerland Credit Union

Eco Loan Unsecured

Personal Loan

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Learn more about home loans

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

Mortgage Calculator, Loan Purpose

This is what you will use the loan for – i.e. investment. 

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

Is there a limit to how many times I can refinance?

There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.

However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.

Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

I can't pick a loan. Should I apply to multiple lenders?

Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success

Will I be paying two mortgages at once when I refinance?

No, given the way the loan and title transfer works, you will not have to pay two mortgages at the one time. You will make your last monthly repayment on loan number one and then the following month you will start paying off loan number two.

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.

How do I know if I have to pay LMI?

Each lender has its own policies, but as a general rule you will have to pay lender’s mortgage insurance (LMI) if your loan-to-value ratio (LVR) exceeds 80 per cent. This applies whether you’re taking out a new home loan or you’re refinancing.

If you’re looking to buy a property, you can use this LMI calculator to work out how much you’re likely to be charged in LMI.