Home loan

How the ABC’s New 1.99% Green Variable Home Loan Compares to the Competition

The CBA has announced it will be Australia’s first major bank to offer a ‘green’ home loan, with rates starting at 1.99%.

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

Borrowers must be homeowners paying principal and interest with a down payment of at least 20% to qualify for the 1.99% rate.

Investors and borrowers with smaller deposits may apply, however, their interest rates will be determined upon request.

Analysis of the RateCity.com.au database shows seven lenders offering green mortgages, with interest rates starting at 1.88%.

Green home loans offered to homeowners

Lender Product Lowest variable rate Maximum loan amount Criteria
ABC Green House Offer

1.99%

None Either certified by the Green Building Council of Australia (GBCA) or a NatHERS rating of 7+ stars, plus other sustainability requirements.
Bank Australia Variable Eco Plus

1.90%

Unspecified NatHERS certificate with a minimum rating of 7.5 stars + solar panels of at least 3KW or a Green Star Home certification.
first mac Green Basic Home Loan

1.99%

$2 million NatHERS certificate with a minimum of 7 stars. Only houses built in the last 12 months.
Gateway bank Green Plus home loan

2.14%

$2 million NatHERS certification or Residency Efficiency Scorecard of at least 7 stars.
loans.com.au Green real estate loan

1.88%

$2 million NatHERS certificate with a minimum of 7 stars. Only houses built in the last 12 months.
Regional Bank of Australia Sustainable real estate loan

2.79%

Unspecified Must meet the minimum environmental standards required by the appropriate state or territory authority, as well as additional measures.
Summerland Credit Union Eco home loan

2.04%

Unspecified Evidence of compliance with state-based environmental planning standards (eg, Basix) dated 2017 or newer, plus additional sustainable features.

Source: RateCity.com.au. Rates are for homeowners who pay principal and interest. LTV requirements apply.

RateCity.com.au Research Director Sally Tindall said: “This is a positive and important step from Australia’s largest bank. Providing an ongoing incentive to build a green home is the right thing to do. »

“CBA rewards its environmentally conscious customers with a rate of less than 2% and, although variable rates are set to increase, the discount will remain valid for the duration of the loan.

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

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

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

CBA Homeowner Variable Rates – for customers who pay principal and interest

Variable loan Lowest advertised rate Other
Additional home loan (70% LVR) 2.19% No compensation, no ongoing fees
Additional home loan (80% LVR) 2.29% No compensation, no ongoing fees
Green House Offer (80% LVR) 1.99% Clearing account, $395 annual fee
Variable real estate loan at a reduced price 3.85% Clearing account, $395 annual fee

Source: RateCity.com.au


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