With buildings in Australia accounting for nearly 25% of carbon emissions it is not surprising that buyers are looking to build more sustainable homes.
A 2020 CSIRO study found that more than 9 million homes in the country do not meet the 7 star Nationwide House Energy Rating Scheme (NatHERS) rating that deems a property sustainable. With only 10% of new homes built received a 7-star rating or higher.
Thus, with the target of building more 7-star energy rating homes, banks and lenders are now offering special green home loans to borrowers that are buying or building eco-friendly homes.
What is a Green Home Loan?
A green home loan is a type of loan that encourages borrowers to buy, build or renovate their homes in an environmentally friendly way. These loans offer discounted rates for homes that pass an eco-friendly threshold. In order to qualify for one of these loans, your future house should pass at least one of these qualifications:*
- A 7 star or higher rating under NatHERS.
- Sustainable property upgrades, this includes:
- Installation of real-time energy monitoring systems.
- Hot water pump or solar hot water system.
- Upgrade to LED lights for at least 75% of all light fixtures.
*Specific qualifications will vary from lender to lender
Why should I get a green loan?
Green home loans befit borrowers that are environmentally cautious or those who want to play a role in building a sustainable future.
Some of the rewards of a green loan are:
- Discounts on home loan interest rates
- Cash backs and rebates
- Additional funding on sustainable home developments
Make sure to compare home loans and green loans to find the cheapest option for you.
What’s the difference between regular home loans and a green loan?
Green home loans are exclusive to homes that meet certain environmentally friendly benchmarks that’s described by the lender.
How Do I check if my house qualifies for a green home loan?
Each lender has different criteria for their green home loans. Our best advice for you to check the lender’s product information on their website.
Who Can I get a Green Loan from?
With the Clean Energy Finance Corporation (CEFC) committing over $120 million into funding green home loans, more lenders are starting to offer this product including:
- Commonwealth Bank, is the first of the four big banks in Australia to offer green loans.
- Bank Australia