It pays to go green: competitive green financial products
Switching to green personal finance products can save you up to $2,300 a year
7 December 2021
- Home loan customers could save up to $1,671 a year in interest by switching to the leading green energy home loan from the average variable interest rate
- Personal loan customers taking out a loan for eco-friendly products could pay up to $303 less in interest a year compared to the average, if they went with the leading green rate
- Car loan providers reward borrowers for going green with discounted rates as low as 3.99%, which could see them pay up to $323 less in interest a year compared to the average
With the nation calling for the Australian finance industry to work towards a more sustainable future, Mozo has crunched the numbers and found going green could save you $2,300 across your personal finance products in the next 12 months .
“Following the United Nations Climate Change Conference, where many Australian banks and insurers pledged to unite private finances against climate change, going green is sure to be top of mind for many Aussies,” says Tom Godfrey, Mozo spokesperson.
“When it comes to reducing your financial environmental footprint, many providers have introduced green options, designed to reward the eco-conscious consumer with competitive rates and added benefits.”
The stigma around going green is that it isn't affordable, but Mozo has come up with four simple green money switches that could see you both bank savings across a range of existing household personal finance products and reduce your impact on the environment.
Taking advantage of a green home loan could see you save $1,671 a year on an average $400,000 owner occupier loan paying principal and interest over 25 years.
“With the property sector contributing almost a quarter of Australia’s greenhouse gas emissions, it's no surprise that many Aussies want to invest in sustainable homes,” Godfrey says.
The leading green home loan rate in the Mozo Database is at 2.30%, 88 basis points below the average non-green variable rate 3.11%.
“To be eligible for a green home loan there are a few hoops you have to jump through, but typically your home will have to be rated 7 stars or higher under the Nationwide House Energy Rating Scheme or have a passive house certification.”
Taking out a personal loan for eco-friendly products could see you pay up to $303 less in interest on an average $100,00 loan paying principal and interest over 3 years.
“From solar panels to water tanks, giving your home an eco-upgrade can make a serious dent in your hip-pocket. If you need a loan to afford your home renovation, taking advantage of a green personal loan could see you bank some serious savings, ” says Godfrey.
The leading unsecured personal loan rate in the Mozo database is a green loan, at 3.99%, 554 basis points below the average variable rate 9.53%. The loan is only available to purchase solar panels, hot water systems and other eligible environmentally friendly products.
Taking out a green car loan for a low emission vehicle could see you pay up to $323 less in interest on an average $10,00 loan paying principal and interest over 5 years.
The leading new car loan in the Mozo database is a green car loan, at 3.99%, 196 basis points below the average variable rate 5.95%. The loan is only available for borrowers looking to purchase low emission vehicles.
Tips for green proofing your finances:
- If you want to cut back on plastic, Gateway Bank recently introduced eco-friendly and fully degradable debit cards
- To find an environmentally friendly superannuation fund, you can check the governments super comparison tool to find a super that meet your ethical needs
- Switch to a more ethical bank, you can check out Mozo’s guide to ethical banking to explore your options
- Before selecting any financial product, ask providers about their green options and read the eligibility criteria to see if it applies to your situation
- Consider swapping to a green power plan or installing solar panels to reduce your carbon footprint
Notes: Property sectors contribution to greenhouse gas emissions from https://www.climateworksaustralia.org/project/built-environment/. Product information and rates as at 10 November 2021. Energy savings calculated comparing the cheapest green energy plan cost to the average energy cost.