Ethical lenders: so your home loan doesn’t cost the earth
Many of us do our best to be a force for good in the world – whether that’s cutting back on single-use plastic, recycling our household waste or shopping from local, environmentally-friendly businesses where possible.
But it’s not just where we spend our money that counts. Where we borrow it from can matter too.
That’s because the interest you pay on a loan is used by lenders to make investments. And sometimes these investments might not line up with your values. For example, your money could be going towards funding businesses involved in fossil fuels, deforestation, tobacco or gambling.
Don’t like the sound of that? An ethical lender might be right for you.
What’s an ethical lender?
As always, you need to follow the money.
Ethical lenders are financial institutions that choose not to invest in activities some may consider harmful, such as:
Logging, fossil fuels and mining of precious minerals
Tobacco, gambling and weapons
Human exploitation and pornography
Businesses involved in animal cruelty
Are ethical home loans more expensive?
While you might be a socially conscious consumer, you also don’t want your wallet to take a hit. After all, a home loan is a long-term commitment, so even small differences in the interest rate you get charged can really add up.
So is there a trade-off when you plump for the ethical option?
Not necessarily.
Ethical lenders can be just as competitive as those with traditional business models.
However, how much the loan ends up costing you depends on several factors including:
Your financial circumstances
The interest rate type (fixed, variable or split)
The loan term
Your repayment frequency
The product’s fees (upfront and ongoing)
The product’s features (e.g. offset, redraw, extra repayments)
So there isn’t a straight answer to the question: ‘Are ethical lenders more expensive?’
The good news is an experienced mortgage broker can help you crunch the numbers on all your options – ethical lenders included. That way, you can be sure your preference to protect the planet isn’t costing you the earth.
Looking for an ethical home loan?
Eventus Financial can help you find an ethical home loan. We have a range of ethical lenders on our panel so can give you home loan options that align with your values.
Schedule a meeting with Alex over the phone, via Zoom or in-person here or by emailing info@eventusfinancial.com.au. And remember, we’re not just the best mortgage broker in Sydney – but also provide services nationwide.