Aussies struggle to balance cost savings and ethics in choosing their lender, data shows
The majority of Australians would rather borrow from a lender with a strong commitment to ethical behaviour, but many were left conflicted between balancing ethical considerations and securing the best interest rate due to economic conditions.
This was according to new research from Great Southern Bank, which found that 92% of Australians with a home loan would rather borrow from a lender with a high standard of business ethics, environmental commitments, and social and community values.
It was top of mind for borrowers outside of cost savings and ranked ahead of customer service and support, more loan features, and easy-to-use technology.
Faced with the highest interest rates in a decade, 78% of the respondents found it challenging to balance their ethics and values with selecting a lender with the best rates, the study found.
“In a rising interest rate environment, it is understandable that Australian households are seeking out the best value loan to meet their specific circumstances,” said Megan Keleher (pictured above), Great Southern Bank chief customer officer.
“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.”
Keleher urged Australians looking for a home loan to ask their lender or broker to provide information about the bank’s environmental, social, and ethical credentials.
“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.
“In our case, Canstar found customers with a Great Southern Bank home loan saved around $1,182 in interest and fees over the year to June 2022, compared to if their home loan was with one of the big four banks. This reaffirms that purpose-led banking can also deliver cost savings.”
The increasing preference for socially conscious banking comes as sustainability becomes more important to consumers. According to recent PWC research, 48% of Australians preferred to buy from businesses with strong company values and commitments to doing the right thing – that was an increase from only 32% in 2019.
Use the comment section below to tell us how you felt about this story.
