There are many ways we can show we care. From boycotting brands that use slaves to volunteering at your local soup kitchen, there are many small simple ways we can make the world a better place. However, small choices like these aren’t everything. We have to think bigger sometimes. What about a socially conscious home loan?
We’ve been reviewing banks and other lenders based on how they impact the community and environment, so you can take out a mortgage while keeping your conscience. In this article, we’ve checked out the Liberty home loan for you (aka Liberty Financial). Read on for:
Do the numbers stack up?
Let’s check the figures first. We’ve put together a list of pros and cons of Liberty Financial’s home loans.
- Low documentation requirements
- Accept most types of incomes
- Will work with JobKeeper, JobSeeker and other welfare allowances
- Redraw and split loan facilities available
- Lets you borrow up to 95% of the value of your property on some of their loans
- They don’t rely on credit scoring when assessing a loan (and offer products for customers with a bad credit history)
- Low deposit options
- Sometimes charges higher than average interest rates
- High Lenders Mortgage Insurance (LMI)
- Annual fees on some loans
- Limited access to physical branches
You may be thinking already that Liberty is not for you. For a better idea of your options, check out our reviews of other lenders. As ethical brokers, we think you shouldn’t have to pay more to choose a socially responsible bank.
Caring, but with some red flags
Boycotting banks with dirty habits like funding coal, gas and oil, or ripping off their customers and staff, is gaining traction in Australia (like the big four). It may sound small, but keeping your money out of the pockets of self-serving institutions sends a strong message. If all of us paid for products and services that help people and the planet, we will make the world a kinder and greener place.
Some community involvement
Liberty Financial works hard to let their customers know they support the community. They’re partnered with several community organisations, including the Mirabel Foundation (which helps children in homes with drug abuse) and Beacon Foundation (which helps Aussie youths become financially independent). They’re also offering financial support for people affected by the pandemic.
It’s worth pointing out that many banks and lenders find charitable partners to work with. Liberty Financial is doing a good thing – but it’s not exceptional. Their custom commitment to improving financial inclusion sounds great, and shows good initiative. However, when businesses are only held accountable to themselves, there’s no guarantee they will return on their promises.
Recent bad press
You should also be wary of retail lenders at all times. This is because they are owned by their shareholders. That means their shareholders’ profit may come before treating their customers right (unlike mutual AKA customer-owned banks).
Liberty Financial is a retail lender, and has recently come under scrutiny. Their recent tax returns, and failure to tell their shareholders about a large loan promised to a senior staffer make them less trustworthy than other lenders.
No word on the environment
As for the environment, Liberty Financial has not released any statements about what they’re doing. This does not mean they’re funding fossil fuels, but it does mean they are free to do so. We can also be relatively sure that they’re not managing their own environmental impact or helping the customers do the same. If they were, it would be loud and clear on their promotional material.
Banks that explicitly state they will not work with companies that harm the planet are more reliable that way. You might be wondering if you can trust banks like Bank Australia to keep their word. Ultimately, it’s in their interest – with environmentally conscious customers, particularly in customer-owned banks, they are obliged to live up to their standards. Don’t doubt the customers. Many of them are not satisfied until they see businesses put their money where their mouth is.
What to do? A Liberty home loan might suit your situation nicely, but leave you a little morally compromised. Again, any lender is better than the big four – who fund fossil fuels, have been involved in many corruption scandals and don’t offer the lowest interest rates on the market. They have enough publicity and rely on customers not knowing any better that they don’t need to offer cheap rates.
It doesn’t have to be this hard. You should be able to borrow without breaking the bank or feeling guilty about where your money is going. That’s where we come in. As ethical brokers, we hold the finance sector responsible for helping the people and planet.
Financial institutions are some of the least trusted businesses in Australia, and we want to fix that. That’s why we don’t have sales commissions – meaning, we don’t push our customers onto the biggest loans just to earn a living ourselves. Instead, we invest half of our upfront commission from the banks with one of our charity partners – like Habitat for Humanity Australia, who builds homes for disadvantaged Australian families, and Save the Children, who are helping children in need around the world. That donation is made in your name, making it tax-deductible.
You shouldn’t feel trapped by your mortgage. With us, your home loan can help make the world a better place. Come to us for ethical brokerage services today.
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.