In a move to “reward customers who are taking steps to reduce their environmental footprint”, Commonwealth Bank has launched a Green Home Offer at 1.99 per cent. 

Conditions apply – applicants must have a 20 per cent deposit and the loan is only available for owner occupiers making principal and interest repayments.

The home must be either certified as a green star home by the Green Building Council of Australia or meet all the following criteria: seven stars or more from the Nationwide House Energy Ratings Scheme; electrified through installation of a heat pump hot water system and have no gas; and have solar panels of a certain size.

CBA’s lowest non-green variable home loan rate is 2.19 per cent, which is available for loans with loan-to-valuation ratios of 70 per cent of less. The standard variable package rate is 3.85 per cent.

Green loans are proliferating. CBA has another green loan that allows existing CBA home loan customers to fund up to $20,000 of solar panels and other eligible clean energy products for their homes. The rate is 0.99 per cent fixed for the 10-year life of the loan.

Other home lenders offering discounted green home loans include Firstmac and Bank Australia.

Providers of green personal loans and car loans, which can be used to purchase environmentally friendly products, include Illawarra Credit Union, Bank First, Australian Military Bank, Brighte, Community First Credit Union, Endeavour Mutual Bank and Regional Australia Bank.

Earlier this month, Community First Credit Union launched a green car loan with a 3.99 per cent rate. It is available for borrowers buying new electric or hybrid vehicles.

Last November, Plenti Group launched a range of electric vehicle finance products, including a financing deal with Tesla. The EV loan rates are around 50 basis points lower than non-EV car loans.