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Bank Australia flags discounts for greener homes

Bank Australia has announced it will provide discounts on newer homes with an energy rating of more than 7.5 stars, as interest rate hikes sting borrowers.

As part of the bank’s net zero target by 2023, it will offer discounts to eligible borrowers who are buying or building a newer homes that is both energy-efficient and generates its own renewable power.

Eligible homes that have a Nationwide House Energy Rating Scheme (NatHERS) rating of 7.5 stars or higher, or the new Green Star Homes certification, plus a solar system could be offered a discount of 0.30 per cent p.a. for up to five years on their home loan interest rate as part of the bank's latest Eco Plus Clean Energy Home Loan. 

The Clean Energy Home Loan, which was first launched in 2020, has since funded over 300 loans for energy efficient homes, which Bank Australia managing director Damien Walsh said was part of the bank’s broader climate strategy.

“Our customers have told us how important action on climate change is to them. We’re proud that our Clean Energy Home Loan already makes up more than 1 per cent of our total home loan portfolio,” said Walsh.

“As we start to set net zero targets for the emissions from our lending, we know we need to keep innovating to incentivise the green homes of the future.”

The new Eco Plus Clean Energy Home Loan is partly-backed by a $30 million investment from the Clean Energy Finance Corporation (CEFC), which CEO Ian Learmonth said will provide Australians with added incentives to choose greener options for their homes.

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“Building homes that have strong energy efficiency measures today creates more resilient cities and regions for the future,” Mr Learmonth said.

“At the same time, incentivising new home buyers and builders to adopt stronger sustainability design standards is an important step in reducing our carbon footprint as we transition towards net zero emissions.”

It follows a suite of lenders providing interest rate discount incentives, as the expectations of rate hikes ring true following the Reserve Bank of Australia’s lifting of the cash rate to 0.85 per cent this week.

While many lenders have been increasing both their fixed and variable rates to reflect the changing rate environment, some have since started reducing rates or offering incentives to attract new borrowers.

For example, Suncorp Bank has also kickstarted a campaign that targets energy price concerns launching a new product that enables eligible Suncorp Bank home loan customers to install a range of green energy-efficient features with a reduced variable rate equity home loan offer.

The Green Upgrades Home Loan will be made available to eligible current or new Suncorp Bank home loan customers (owner-occupiers or investors) with a mortgage of at least $150,000 with a loan-to-value ratio (LVR) of 80 per cent or less from the end of June.

Meanwhile, the Commonwealth Bank of Australia (CBA) has also announced a new offer for free internet for three years to eligible conditionally pre-approved home loan customers.

[Related: Lenders roll out cost of living incentives to tempt mortgagors]

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