CBA’s green home loan

COMMONWEALTH Bank is rolling out discounted home loans to owner-occupiers with energy-saving houses.

The bank is now taking expressions of interest for its green home loan, offering homebuyers the chance to snag a mortgage at a 1.99 per cent standard variable rate, or a comparison rate of 2.45 per cent.

The lower rate is on offer for owner-occupier customers who are making principal and interest repayments on their loans, who take CBA’s wealth package, and can pay a 20 per cent deposit.

Other eligible borrowers, such as investors, can also seek to access CBA’s discounted green home loan rate.

However, to apply homebuyers must have a building that is certified by the Green Building Council of Australia or upgrade their houses with solar panels, heat pump hot water systems, hold a seven star or greater Nationwide House Energy Rating, and have no gas to the building.

Homeowners can apply for the loan if they can show plans to upgrade the house.

CBA spokesman Michael Baumann said the bank wanted to reward new and existing customers who took action to cut emissions.

He said the bank was taking action after many younger homebuyers had pushed for better recognition of environmental sustainability.

“It’s really to basically help Australians to rethink their journey on the net zero transition, to help give a bigger push from the biggest lender in the market,” he said.

Mr Baumann said the loan was aimed at new homebuyers and upgraders as the bank did not want it only to be available for volume home builders.

Although apartment owners can’t access it at the moment, Mr Baumann said the bank would reserve the right to take the program wider.

Mr Baumann said the green loan offer was part of a pattern from CBA and came after the bank launched a green fixedrate loan scheme to buy and install clean energy products of up to $20,000 in cost. That loan offer was made available to 600,000 CBA customers.

CBA has been seeking to slash its emissions in recent years, with the bank running a pilot program to fund customers installing solar systems in 2020.

The bank is reviewing the emissions associated with its home loan portfolio and plans to release it later this year.

However, Mr Baumann said CBA had no target or limit to its green home loan product.

“It’s an offer we want to leave in market for a long, long period of time,” he said.

“We want to keep it at an attractive rate.”

RateCity said CBA’s move saw the bank join six other lenders offering green mortgages.

RateCity research director Sally Tindall said CBA’s move was an “important step”, but said accessing the loan would prove difficult for many.

“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,” she said.

“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.”