Acacia, uno partner for climate mortgage app

Financial technology provider Acacia Money has launched an app that assesses users’ mortgages based on financial and environmental factors.

The app uses algorithms to identify banking, superannuation and energy options for the user, based on both environmental and financial credentials.

It is marketed as allowing users, in under two minutes, to see how their mortgage stacks up both environmentally and financially against alternative loan options, with estimated monthly savings based on their current loan.

The app uses climate scores developed by Acacia and institutional research partners, rating financial institutions and products in terms of climate policies and governance, and their lending to the fossil fuel industry.

Vincent Turner, chief executive of uno Home Loans, explained to Mortgage Business that brokers under his group will start referring their customers to Acacia.

They will be prompted to download the app and input their banking data, either through self-reporting, or by connecting their banking through the consumer data regime (CDR), also known as open banking.

Acacia’s app will generate suggested products from uno’s approved product list (APIs), pulling pricing and product details from the API.

Customers can then consider their options with a dedicated uno broker, who has been trained up on the Acacia system, with an objective to balance customers’ interests between climate and finances.

The move will make the brokerage one of the first in Australia (if not the first) to overlay climate scores on top of mortgage providers, Mr Turner said.

He also believes customers will increasingly consider climate change in their banking and mortgage choices.

“I’ve personally been kicking this around for about four years. And the extent to which people are saying ‘this is a factor for me’, has only gotten bigger over those last four years,” he said.

“I’d say four years ago, it was probably too early and no-one was asking for this. But what we’re seeing now, especially in the last year or so, is that people are starting to ask us, even without asking them whether this is important to them.”

It seems to have been a combination of factors that brought the issue to the fore, he added, with mortgage rates beginning to rise and the future around maintaining temperature rises below 1.5 degrees seeming like a “bit of a battle”.

“It’s obviously a key issue for the election at the moment, so it’s become very topical,” Mr Turner said.

“We’re starting to hear a lot more noise about it than we had a few years ago.”

However, customers don’t typically have to choose between their ideal price and environmental impact.

As Mr Turner asserted, “it’s not really a choice”.

“There’s actually an option that threaded the needle on both of those typically,” he said.

“So it’s more about saying, ‘Well, if you’ve got two loans here, and they’re essentially the same price. And this one’s much better for the environment than this one.’ Then why wouldn’t you go with the one that’s better for the environment?”

Anil Sagaram, founder and chief executive of Acacia echoed Mr Turner, commenting there are now “providers out there with strong offers from both a financial and environmental perspective”.

“For someone with an average mortgage of $595,568, we are talking about a potential savings of up to $387 a month, or $139k over the term of the loan, by moving to a greener bank,” he said.

“Our aim is to make it incredibly easy to take action and connect with these providers, enabling smarter financial decisions that align with your values, all from the palm of your hands. That’s a win-win.”

Previously, Mr Sagaram led the design and development of BT Panorama, Westpac’s flagship wealth management platform.

[Related: AMP partners with Nano for new digital mortgage]