Borrowers are conflicted between ethical considerations and finding the best rate when choosing their lender.

A study by Greater Bank shows that Australians are facing a dilemma in prioritising ethics or cost-savings when choosing their lender.

The research found that while 92% of home loan borrowers would prefer lenders with a high standard of business ethics, environmental commitments, and social and community values, around 78% said they find it challenging to balance these values and going for those with the best rate.

Great Southern Bank chief customer office Megan Keleher said in a rising rate environment, it is “understandable” that many households are seeking out the lender that can provide the best rate and loan product.

“While there’s a perception that choosing a green or ethical lender is more expensive, research has found this is not necessarily the case — lenders with strong values can also provide excellent rates, reduced or no fees, and longer-term value, meaning borrowers don’t have to compromise on choosing a bank that aligns to their values,” she said.

The study showed that 94% of those who are refinancing or are still planning to cite rising rates and increasing cost of living as a motivation.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers. Scroll down to read the rest of the article or click here.

Rates
Features
Fees
Other
Lender
Variable
More details
Online ExclusiveUp to $4k cashbackINCLUDES NOV RBA RATE INCREASE
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
Online ExclusiveUp to $4k cashbackINCLUDES NOV RBA RATE INCREASE

Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
More details
Variable
More details
  • Up is 100% owned by Bendigo Bank.
  • Up to 50 offset accounts
  • New joiners get $10 by signing up to the app using code UPHOMEYM. (T&Cs apply)

Up Home Variable (Principal & Interest) (LVR ≤ 90)

  • Up is 100% owned by Bendigo Bank.
  • Up to 50 offset accounts
  • New joiners get $10 by signing up to the app using code UPHOMEYM. (T&Cs apply)
More details
Variable
More details

Variable Rate Home Loan – Refinance Only

    More details
    • Immediate cashback upon settlement
    • $2000 for loans up to $700,000
    • $4000 for loans over $700,000

    More details
    Important Information and Comparison Rate Warning

    Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of December 4, 2023.

    Borrowers’ priorities when choosing a lender

    According to the study, the top five priorities of borrowers outside cost-savings when choosing their lender are:

    • Business ethics, social and community values
    • Customer service and support
    • More loan features
    • Environmental actions and targets
    • User-friendly technology

    Ms Keleher said first-home buyers, investors, or refinancers who would like to know their lenders’ ethics must reach out to their brokers or to their lenders to ease their dilemma.

    “You may be pleasantly surprised to realise there are responsible banks out there that are able to also provide cost savings on loans,” she said.

    “A number of Australian banks and home loan providers have committed to ethical business practices and environmental targets in recent years.”

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