Original source: https://www.businesstimes.com.sg/banking-finance/ocbc-pushes-cheaper-home-renovation-loans-for-eco-friendly-borrowers

OCBC has launched home and renovation loans that incentivise residential property owners to make their homes more eco-friendly in exchange for lower interest rates - a first in Singapore.

To qualify for preferential rates under the "Eco-Care" Home and Renovation Loans, borrowers have to pass the Building and Construction Authority's (BCA) Tropical Home Energy Efficiency Assessment (THEEA) - an online self-assessment tool predicting homes' energy consumption with a "pass" or fail" rating.

To pass the assessment, customers need to demonstrate their intention to have an eco-friendly approach to furnishing their homes with greener alternatives across three categories, namely home design, energy-efficient appliances and smart home features that help regulate energy consumption.

For the "Eco Care" Home Loan, the rate for the first two years would be the one-month compounded Sora plus a spread of 0.98 per cent. This would be equivalent to about 1.2 per cent currently, based on prevailing rates.

Otherwise, the existing Sora-pegged loan rate would be about 1.4 per cent for the first year - this comes from the one-month compounded Sora rate plus a spread of 1.2 per cent.

The Business Times' check on the OCBC website showed that this was the cheapest available home loan, compared with the Sibor-pegged loan rate of about 1.4 per cent and the fixed rate of about 1.38 per cent for the first year.

Customers of the "Eco-Care" Home and Renovation Loans are also eligible for Sunseap Energy solar energy plans, which offer a one-time S$80 bill rebate.

To encourage borrowers to stay green, OCBC will reward those who undergo and pass another THEEA assessment by achieving an energy usage below the national average for their household size, after they have moved in.

Customers who achieve this level of energy usage will be given reward points, known as OCBC$, which can be used to redeem a wide range of rewards on the bank's STACK marketplace, referring to its multi-partner loyalty platform.

Earlier this year, OCBC launched both the electric vehicle and solar panel loans to make the financing of green alternatives more accessible to consumers. The bank has pledged to grow its sustainable finance portfolio to S$25 billion by 2025 - after achieving the S$10 billion-by-2022 goal, two years ahead of time.