Singapore's first 'Eco Care' home and renovation loan to incentivise eco-friendly customers with lower interest rates and rewards
OCBC Bank launched the country’s first ‘Eco-Care’ Home and Renovation Loans which use Building and Construction Authority’s (BCA) Tropical Home Energy Efficiency Assessment (THEEA) as the criteria to determine an applicant’s eligibility. This is the first time that the THEEA is used as a pre-requisite to apply for a home or renovation loan in Singapore. These two ‘Eco-Care’ loans reward eligible home-owners with lower interest rates, giving them the impetus and incentive to take more concrete measures to make their homes more eco-friendly.
In order to qualify for preferential rates under the newly-launched ‘Eco-Care’ Home and Renovation Loans, borrowers of both public and private residential properties are required to pass 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 – home design (e.g. usage of solar window film), energy-efficient appliances (e.g. air-conditioning, refrigerators and televisions with at least 3 or 4 ticks for energy efficiency) and smart home features that help regulate energy consumption (e.g. smart thermostat for air-con control).
See Annex A for more details on THEEA
Details and preferential rates of the ‘Eco-Care’ Home and Renovation Loans:
‘Eco-Care’ Home Loan
‘Eco-Care’ Renovation Loan
• 1M Compounded SORA package
• Flexibility to prepay up to 50% of the loan amount within the lock-in period
• Year 1: 1M Compounded SORA + 0.98%
• Year 2: 1M Compounded SORA + 0.98%
• Thereafter: 1M Compounded SORA + 1.40%
• Loan tenure: 1 – 5 years
• Interest rate: 3.98% (monthly rest rate)
• Borrow up to six times your monthly income
• Loan can be disbursed within 1 working day after approval
In addition, to help home-owners make their homes more eco-friendly, customers of the ‘Eco-Care’ Home and Renovation Loans are eligible for Sunseap Energy solar energy plans, which offer a one-time $80 bill rebate.
Continuous incentives to stay Green
To encourage borrowers of the ‘Eco-Care’ Home and Renovation Loans to stay green, OCBC Bank will reward those who undergo and pass another THEEA assessment by achieving an energy usage below the national average for their household size, after they have moved in. Customers who achieve this level of energy usage will be given reward points, known as OCBC$, which can be used to redeem a wide range of rewards on the Bank’s STACK marketplace.
STACK is OCBC Bank’s multi-partner loyalty platform which accumulates, converts and utilises rewards points and air miles across the different partners and merchants with ease and speed, via an online tracking dashboard. A new ‘Eco-Care’ series of rewards was added to the platform earlier this month.
Home-owners applying for the OCBC ‘Eco-Care’ Loans can take the THEEA on OCBC Bank’s ‘Eco-Care’ Home and Renovation Loans application page.
Mr Sunny Quek, Head of Consumer Financial Services Singapore, OCBC Bank, says, “As one of the market leaders in home and renovation loans, being able to launch the Singapore’s first series of eco-friendly home and renovation loans is a key step to helping customers be proactive when it comes to saving energy in their new homes. BCA’s Tropical Home Energy Efficiency Assessment Tool is instrumental in helping us put together a robust framework to perform energy assessment during the loan application, and to verify the results through actual energy consumption within the next 12 months. Together with our existing ‘Eco-Care loans for solar panels and electric vehicles which were launched earlier this year, these two new products further strengthen our suite of sustainability consumer loans.”
Mr Cheng Tai Fatt, Managing Director of Built Environment Research and Innovation Institute (BERII), BCA, said: “We are pleased that OCBC Bank has decided to use BCA’s energy evaluation tools to foster a more sustainable Singapore. THEEA will be useful in predicting and improving energy consumption in homes for many homeowners. This collaboration also supports the Singapore Green Building Masterplan (SGBMP), which is a collaborative effort involving industry stakeholders and the wider community in pushing for green buildings. BCA welcomes like-minded partners to work towards our collective goal of providing a sustainable and liveable Built Environment for all.”
Playing our part for a future low-carbon world
OCBC Bank’s new ‘Eco-Care’ suite of loans for consumers is one of the many steps in the Bank’s climate action approach, which is focused on taking strategic action to reduce or store CO2. Making up some 80 per cent of the greenhouse gases, CO2 is causing extreme natural disasters and temperature shifts around the globe.
Earlier this year, OCBC Bank launched both the electric vehicle and solar panel loans to make the financing of green alternatives more accessible to consumers. As part of the nation’s Long-Term Low Emissions Development Strategy, quadrupling solar energy production by 2025 is one of the key pillars and OCBC Bank’s consumer loan for residential solar panels is aimed at facilitating the country to reach its target.
The Bank has already begun its journey of transitioning to a sustainable world. In 2019, OCBC Bank became the first Asian bank to stop financing new coal-fired plants.
It also supported the planting of trees to store CO2. The OCBC Arboretum, a landmark project at the Singapore Botanic Gardens, conserves and studies 200 species of 2,000 dipterocarp trees that can store as much as 80 million kg of CO2 over their lifetimes.
On the business front, OCBC Bank has stepped up to do even more, having pledged to grow its sustainable finance portfolio to S$25 billion – after achieving the S$10 billion-by-2022 goal, two years ahead of time. The Bank has funded projects in the region that harness the wind and capture the sun’s rays to generate clean energy. These projects range from wind and solar farms to electric cars, hybrid buses and solar panel installations.
In December 2020, OCBC Bank adopted the Equator Principles, an internationally-recognised risk management framework adopted by financial institutions worldwide which will guide how the Bank determines, assesses and manages environmental and social risks in projects. OCBC Bank’s voluntary adoption of the Equator Principles is an extension of its Responsible Financing framework which the Bank has put in place since 2017.