The Commonwealth Bank of Australia has announced that it will offer a “CommBank Green Loan” product. This loan will give families the option of taking out a 10-year fixed loan of up to $ 20,000 for only 0.99% interest per year.
This rate is much lower than that of any personal loan and even much lower than the record home charge rates which are usually the cheapest form of financing.
If you are a CommBank home loan customer like having a mortgage with them (or moving to their place) then you can get up to A $ 20,000 to spend on qualifying small scale renewables such as solar panels, batteries and charging stations for electric vehicles.
It should be noted that the property is used as collateral for the loan, but given the limit on the loan amount and the very low interest rate, I doubt that many will default on this loan.
It seems there is no limit on the number of combinations you can configure up to the limit of $ 20,000. That means you could spend $ 13,000 on home battery storage, an additional $ 6,000 on solar panels (and presumably the inverter), and up to $ 1,000 on an electric vehicle charger.
Probably the biggest omission from this program is the ability to use the green loan to buy a green car. As we know, electric cars are currently very expensive which makes affordability more difficult. If a family decided to spend the AU $ 20,000 to lower the purchase price of the car and were happy to pay 1% of that money for the next 10 years, it could make an electric vehicle affordable today.
Overall this looks like a great new product, something that I hope more banks will offer to customers.
CommBank indicates that this product is currently in pilot stage and should be launched in the coming months. If you want to access it, you can register your interest in the Green loan here.