With an increase in our focus on sustainability and the environment, home buyers will be pleased to know they can get some great home loan benefits for building more environmentally homes.
What is the Green Home Loan?
A green home loan is one that rewards borrowers for building or buying eco-friendly homes. In short, that means the home needs to be certified as a Green Home by the Green Building Council of Australia. Alternatively, there are several other conditions you need to meet.
Green home loans offer a variety of benefits, including:
- Lower interest rates
- Longer fixed terms
- Cashbacks and rebates from governments
- High loan to value ratios of up to 95%
- The possibility to borrow more because the interest rate is lower
You should be aware that all green home loans are different, so every benefit listed above is not guaranteed for every home. In addition to the above, many banks also offer companion loans for green household improvements, such as installing a solar system or solar hot water system.
What you need to know about Green Home Loans
If you’re considering buying a house and you’re keen to make it more sustainable, there are plenty of benefits to getting a green home loan. Here’s everything you need to know.
Who is offering it?
There are a few banks around Australia offering green home loans, each with their own pros and cons that you should investigate before signing up. The experienced brokers at BrokerCo have all of the knowledge you need, and they can help make the right choice for you. At the time of writing, green home loans are available through:
- Commonwealth Bank
- Gateway Bank
- Summerland Credit Union
The banks above offer their own green home loan products, but there are other lenders you can approach too. The Clean Energy Finance Corporation (CEFC) is investing up to $60 million in green homes. In partnership with Bank Australia and Regional Australia Bank, you can get a CEFC-backed home loan for your new green home.
How do I qualify for a green home loan?
As with all home loan products, every lender has different criteria you need to meet in order to be eligible. Of course, you need all the standard things such as a stable income, savings record, good credit history and more. But in terms of criteria specific to green home loans, it varies quite a bit depending on the lender and loan type. We won’t list every criterion here, as there are simply too many. Some key points though include:
- Green Star rating from Green Building Council of Australia
- Nationwide House Energy Rating Scheme (NatHERS) rating of 7 or above
For existing homes, there can be sustainability upgrade criteria too, such as installing solar systems, double-glazing windows, upgrading to LED lights and many more. For each individual home loan, we encourage you to check the criteria carefully so that you can incorporate them into your plans.
Why consider a green home loan?
There are plenty of reasons to consider a green home loan. The reality is, many modern homes are built to be energy-efficient, sustainable and more eco-friendly than before anyway. So, if you only need to make a few clean, green updates to qualify for a better home loan, why not do it? Some other advantages include:
- Your home will have a smaller carbon footprint
- You’ll save plenty on future energy and water costs
- Increased property value
- Your home will be more comfortable and healthier to live in
How a mortgage broker can help
If you’d like to know more about green home loans and whether you might be eligible, we’re here to help. BrokerCo can compare home loan products from over 40 lenders, ensuring we always find the perfect loan for you. If you want to go green, contact BrokerCo today!