Green Home Loans: unlocking sustainable living and financial savings

WITH DANIEL WALSH AND LEIGH DELEDIO FROM UFINANCIAL

Australia is grappling with two significant challenges: the climate crisis and housing affordability.

Tackling both issues simultaneously seems like an ambitious goal, but the emergence of Green Home Loans presents a promising solution.

What is a Green Home Loan?

Green Home Loans are a forward-thinking financial instrument designed to reward home buyers and upgraders for minimizing their environmental impact. These specialised mortgages offer lower interest rates, reduced fees, cash-back rebates, and additional funding for energy-efficient home upgrades.

Given that the property sector is responsible for almost a quarter of Australia’s greenhouse gas emissions, adopting green upgrades and construction becomes pivotal in addressing the climate crisis. While going green can be financially challenging, especially when saving for a home deposit, lenders supporting ethical banking initiatives deserve commendation for incentivizing eco-friendly choices.

What is a green home?

A Green home is characterised by an energy-efficient design, aimed at reducing carbon emissions. This includes features such as solar panels, home batteries, electric vehicle charging, double-glazed windows, heat pumps, upgraded insulation, passive heating and cooling, smart lighting, wastewater treatment, and energy-efficient appliances.

Investing in these green features may require an initial financial commitment, but the long-term benefits are substantial. Lower environmental impact, improved home conditions, reduced energy bills, and increased resale value make it a wise and sustainable choice.

Do I qualify for a Green Loan?

Eligibility for Green Home Loans varies among lenders, necessitating a discussion with a broker to understand specific requirements. However, most lenders will require a home to have certifications such as a seven plus stars NatHERS rating, a seven plus star Residential Efficiency Scorecard, a Passive House Certification, or a Green Star Rating.

The NatHERS rating, based on the Nationwide House Energy Rating Scheme, provides a star rating to a home based on its energy efficiency, with a higher rating indicating greater environmental friendliness. A seven plus star NatHERS rating is often a prerequisite for a Green Home Loan qualification.

Green home features may include:

• Solar panels
• Home batteries
• Electric vehicle charging
• Window double glazing
• Hot water heat pump or solar hot water systems
• Upgraded Insulation
• Passive heating and cooling
• Smart lighting
• Wastewater treatment
• Energy monitoring systems, and
• Energy efficient appliances.

While the initial investment in these products and upgrades may be higher, the long-term benefits are well worth it in the long run. By making this commitment, you not only reduce your environmental footprint but also enjoy healthier home conditions, lower energy bills, and an enhanced appeal and resale value for your home. It’s a win-win situation for both you and the planet.

Lenders offering Green Home Loans

A growing number of lenders are embracing Green Home Loans to support those seeking efficient, sustainable, and healthy homes.

These lenders include:

• CommBank’s Green Home Offer
• Firstmac’s Green Offset 90
• Bank Australia’s Clean Energy Packages
• Gateway Australia’s Green Home Loan, and
• Regional Australia Bank’s Sustainable Home Loan.

Understanding each lender’s eligibility criteria is crucial, and our team is ready to guide you through the available options.

Exploring Other Green Finance Options

For those not in need of a home loan but still committed to making eco-friendly choices, various green finance products are available. This includes car loans for efficient vehicles, such as Electric Vehicles (EVs) and hybrids, as well as personal loans for eco upgrades and products such as home batteries, double glazing, solar panels, and off-grid systems. It’s essential to check with your broker to ensure the specific product aligns with their green criteria.

For more information on Green Home Loans or to discuss your options, our friendly team of brokers is ready to assist you in making a sustainable and responsible choice for your future.