Bank Australia teams up with CEFC to launch new clean energy home loan

Bank Australia, the self-proclaimed ‘bank Australia needs’ is truly putting its ‘clean money’ where its mouth is with the launch of its new Clean Energy Home Loan.

That’s right the bank that doesn’t invest in fossil fuels, live animal export or gambling has partnered up with the Clean Energy Finance Corporation to offer eligible borrowers a home loan with a distinctly green incentive; a discount of 0.40%.

Just how low are the interest rates for the Clean Energy Home Loan?

This is where the CEFC comes in, because with the financial support of this green-centred finance corporation, Bank Australia are able to offer borrowers a 0.40% discount. The new green home loan comes as either a fixed interest rate home loan or a variable interest rate home loan. And with interest rates starting firmly in the 2% club, it’s a financial partnership that has certainly paid off.

In fact, if you are planning to buy or build an energy efficient home, then you could benefit from an interest rate as low as 2.44% p.a. (3.50% comparison rate*). This particular interest rate is currently the lowest on offer for a 2 year fixed interest rate loan in the Mozo database. The loan is available to borrowers with an LVR less than 70% (Loan to Value Ratio) and as with most fixed interest rate home loans, the discount applies for the full, fixed 2 year period.

But that’s not all, because if you’re looking to take out a loan of more than $500,000 to finance your clean energy dreams, you’ll be happy to hear that variable interest rates start as low as 2.78% p.a. (3.39% comparison rate*, LVR less than 70%). For variable interest rates, the discounted rate will apply for the first five years of the loan.

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What criteria do I need to meet to be eligible for Bank Australia’s Clean Energy Home Loan?

To be eligible for Bank Australia’s Clean Energy Home Loan you will have to be either buying or building a home rated a minimum of 7 stars under the Nationwide House Energy Rating Scheme (NatHERS). 

With this scheme buildings can be awarded a star rating out of 10, based on how efficient the energy use is. What does that look like? Well a house with an energy rating as high as 7 stars, should not only be able to stay cooler in the summer and warmer in the winter without the use of air conditioners or heaters, but it should also be designed to work better with its environment.

An energy efficient home is by default, kinder to the environment. It uses less electricity and is often made of better quality materials. 

As CEFC CEO Ian Learmonth said, “This green home loan will fill a gap in the market, giving builders and new home buyers a financial incentive to adopt sustainable design principles from the start of the project.”

Learmonth pointed out that although Australia is leading the way in residential rooftop solar, the next step to get serious about cutting carbon emissions, is to start investing in better building design and construction.

RELATED ARTICLE: Why the bigger banks aren’t always the best place to find a home loan in 2020

What’s next for Bank Australia's green home loan?

If you’re aiming higher than a 7 star NatHERS rating for your new clean energy efficient home, then you might want to hold your non-racing horses, because Bank Australia are also planning to offer higher discounts for homes with a higher energy efficiency rating in the near future.

Don’t quite have the funds to make your environmentally harmonious home a reality just yet? Why not check out the home loan deals below or head to our home loans comparison page, for a full list of home loans compared by Mozo.

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  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

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    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

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  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

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    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

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  • Hot Deal$3,000 cashback when you refinance with Virgin Money (T&Cs apply)
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    Special Offer Reward Me Fixed Rate Home Loan

    Owner Occupier, LVR <80%, 300k+

    interest rate
    comparison rate
    Initial monthly repayment
    1.94% p.a.
    fixed 2 years
    2.77% p.a.

    Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.

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*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

**Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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