Customer-owned bank introduces commercial green loan

On the back of Gateway’s investment loan book lifting 17 per cent in its financial year results 2023, alongside doubling its green home loan portfolio the bank has announced its first green home loan for investment properties.

Investors eyeing apartments or houses that meet specific energy efficiency criteria stand to benefit from a new variable rate of 5.73 per cent.

“Although the investor market is a little subdued post-COVID-19, this investment property loan product gives brokers an opportunity to diversify into a small but rapidly growing niche – the environmentally conscious investor,” chief executive of Gateway Bank, Lexi Airey, said.

Notably, households’ heating and cooling contribute approximately 40 per cent of overall energy consumption, with buildings accounting for around 23 per cent of Australia’s total emissions, according to the Australian Sustainable Built Environment Council (ASBEC).

Consequently, there’s a growing trend among borrowers to enhance energy efficiency within their homes.

“Savvy, climate-aware investors are looking to purchase future-ready residential properties as they come on to the market,” Ms Airey said.

Results from Gateway Bank’s national survey, conducted in 2021 and 2022, involving over 1,000 interviews, underscored the increasing interest in green home loans.

Nearly 80 per cent of respondents expressed willingness to incorporate solar panels and other eco-friendly features to qualify for such loans, marking a 2 per cent rise from the previous year.

Anticipating changes to construction codes in 2023 at both state and federal levels, Ms Airey noted the necessity for meeting more rigorous requirements.

“Over time, the number of certified energy-efficient business or residential buildings is set to increase exponentially,” she highlighted.

The Investor Green Plus Home Loan incentivises green home investments by offering a minimum 0.25 per cent discount off Gateway’s standard Investor Premium Package Home Loan variable rate.

This reward is attainable if the investment property achieves a 7-star or higher NatHERS or Residential Efficiency Scorecard or if it’s recognised as a Green Star Designed or certified home by the Green Building Council of Australia (GBCA).

In addition, the surging interest among brokers to comprehend green loans has prompted Gateway Bank to increase the frequency of its broker green niche workshops from monthly to fortnightly, providing brokers with in-depth insights into the green offering, eligibility criteria, and benefits for their clients.

Alongside the Investor Green Plus Home Loan, Gateway Bank has extended its commercial lending options with a Green Commercial Property Loan.

Green lending grows

Given rising demand and necessity for green homes, more lenders in Australia are now offering green home loans or discounted personal loans to support energy-efficient builds, renovations, or purchase upgrades.

Among the prominent players, all of the big four banks provide some form of green home loan, with the Commonwealth Bank (CBA) and National Australia Bank (NAB) offering discounts on full mortgages.

CBA recently expanded its green financing range to include support for home loan and personal loan customers looking to purchase electric and hybrid vehicles. Similarly, NAB offers a discounted personal loan for energy-efficient home upgrades.

Australian and New Zealand Bank (ANZ) offers a mortgage top-up for sustainability renovations and electric/hybrid vehicle purchases. Westpac extends green loans to individuals and customers, offering fixed-rate discounts for sustainable purchases like solar panels and batteries.

[Related: A green home, a green planet]