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Mutual bank offers rate discount on green mortgages

A customer-owned bank has launched a new home loan offering that enables borrowers to access a discounted interest rate if their home meets certain environmental criteria.

As part of its Pocket & Planet initiative, Gateway Bank has announced new additions to its range of environmentally conscious products and services.

Starting from this week (24 May), Gateway Bank is offering “environmentally conscious borrowers” discounts on their Premium Package mortgage products if they have environmentally sustainable homes.

The Green Home Loan forms part of the Premium Package offering (for loans of between $250,000-$2 million on an 80 per cent loan-to-value ratio) and gives borrowers a discount of 0.15 per cent if their home has at least three of the following:

  • Solar and photovoltaic (PV) panels 
  • Solar battery storage systems 
  • Solar hot water systems 
  • Gas hot water systems
  • Solar pool heaters 
  • Solar hydroponic heat pump systems 
  • Rainwater tanks 
  • Water pumps 
  • Grey water treatment systems 
  • Home insulation that meets government standards for geographic area
  • Certified double glazing for windows
  • Split systems, evaporative cooler or star-rated zoned air-conditioning units with either a minimum energy rating 4/6 stars or minimum 6/10 stars 
  • Energy-efficient LED lights in over 75 per cent of the property.

Rates on the Green Home Loan therefore start from 2.44 per cent (2.78 per cent comparison).

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Similarly, under the Green Plus Home Loan, borrowers are able to access a discount of 0.25 per cent on the Premium Package if their property has a Nationwide House Energy Rating Scheme (NatHERS) rating of 7 stars or higher (evidenced by a NatHERS Certificate completed by a NatHERS certified assessor) or equivalent (for those in the ACT, which has its own system).

Rates on the Green Plus Home Loan start from 2.34 per cent (2.69 per cent comparison).

Speaking to Mortgage Business about the new offerings, Gateway Bank CEO Lexi Airey commented: “Generally, we’ve found that if you want to be green and you want to do something good, it’s going to cost you a bit more.

“So, what we wanted to do was to look at how we could provide products that allow you to be green, do the right thing but also get rewarded for it. 

“With the new green home loans, we’re recognising those who are making a step on the journey of sustainability and rewarding that.

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“As the famous philosopher Kermit the Frog said: ‘It’s not that easy being green’. So, we’re trying to help.”

New Eco Loan and Eco Debit Card

As well as the discounted mortgages, Gateway Bank has also launched its lowest rate personal loan, the Eco Loan, to help more Australians purchase and/or install environmental upgrades to their homes.

The loan, which start from 5.75 per cent per annum (6.76 per cent comparison), can be accessed by those looking to install/purchase:

  • Solar and photovoltaic (PV) panels
  • Solar battery storage systems
  • Solar or gas hot water systems
  • Solar pool heaters
  • Solar hydroponic heat pump systems
  • Rainwater tanks
  • Water pumps
  • Grey water treatment systems
  • Home insulation that meets government standards for geographic area
  • Certified double glazing for windows
  • Energy-efficient LED lights.

The bank has also announced that it is launching “Australia’s first plant-based bank debit card”.

As of this week, the bank is moving so that all of its bank cards are made from polylactic acid (PLA), a monomer that is created from fermented plant starch – typically corn, sugarcane or cassava.

According to Gateway Bank, the material uses 65 per cent less energy than producing a conventional plastic card and generates 68 per cent fewer greenhouse gases than fossil-fuel based PVCs, which the majority of payment cards are made from.

The Gateway Eco Debit card is manufactured by paytech company G+D.

Speaking of the card, Ms Airey commented: “As well as supporting our customers, we want to make a difference in our imprint on the planet as well.”

She concluded: “We’re proud to offer Australians some genuinely sustainable borrowing options at competitive rates.

“We believe banking shouldn’t cost the earth – in any sense.

“These initiatives are all part of our Pocket & Planet initiative – our growing range of environmentally conscious products and services that meet the needs of our customers and the planet.”

Earlier this month, Gateway Bank unveiled a Monthly Premium LMI offering to help those with low deposits access a mortgage sooner.

Under the new structure, borrowers taking out a Gateway Bank mortgage with a deposit of at least 5 per cent of the property value can choose whether they would prefer to capitalise the cost of lender’s mortgage insurance (LMI) into the loan to cover the risk to the lender, or pay an upfront fee, or instead make use of a Monthly Premium LMI.

The premium is paid on a monthly basis only until the loan-to-value ratio of the mortgage drops below 80 per cent (at which point LMI is no longer required).

[Related: CBA announces green loan]

Mutual bank offers rate discount on green mortgages
Mutual bank offers rate discount on green mortgages
mortgagebusiness

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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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