9 in 10 borrowers prefer ethical lenders

The customer-owned bank’s research found that 92 per cent of Australian borrowers would prefer to go with a lender that holds a high standard of business ethics, environmental commitments, and social/community values.

Other than cost savings and ethics, the other priorities for potential borrowers when choosing a lender were customer service and support; more loan features; environmental action and targets and; easy-to-use technology.

Further findings showed that 78 per cent of borrowers found it challenging to balance their personal ethics and values with choosing a lender with the best rates among the current economic headwinds, while 94 per cent of those looking to refinance or are refinancing are seeking better deals due to rising interest rates and cost-of-living pressures.

Great Southern Bank chief customer officer Megan Keleher said it’s understandable that Australian households are looking for the best value loan to meet their specific circumstances given the rising interest rate environment.

“While there’s a perception that choosing a green or ethical lender is more expensive, research has found this is not necessarily the case,” Ms Keleher said.

“Lenders with strong values can also provide excellent rates, reduced or no fees, and longer-term value, meaning borrowers don’t have to compromise on choosing a bank that aligns to their values.”

She encouraged prospective borrowers, whether they’re first home buyers, refinancers or investors, to ask their lender or broker to provide information about the lender’s environmental, social, and ethical credentials.

Banks go green

According to the non-major bank, a number of banks and home loan providers have already committed to ethical business practices and environmental targets over the last few years.

Customer-owned bank, Heritage Bank, earned the Australian government’s Climate Active certification in December 2022.

The Climate Active certification is granted to organisations when they prove they are carbon-neutral and have committed to environmental sustainability.

Heritage joined the big four banks along with Great Southern Bank, Bendigo and Adelaide, and Suncorp.

Heritage Bank chief executive Peter Lock said at the time that it was an honour as it “strives to have a positive impact on the communities in which it operates” and being awarded Climate Active certification is a clear demonstration that it is putting the interests of its people and planet first.

“We have implemented numerous initiatives to reduce our emissions across our locations and are supporting some incredible projects like native bush regeneration through the purchase of carbon offsets,” Mr Lock said.

[RELATED: Heritage Bank gains climate neutral status]