Green home loans
Reduce your environmental footprint and increase your savings with a green home loan.
Green home loans are designed to encourage borrowers to buy, build or improve their homes in an environmentally friendly way. They typically offer discounted interest rates for houses that are energy efficient, and lessen their environmental footprint.
What's the criteria for a "green" home?
Some lenders will reward you with lower interest rates if your house meets a certain criteria that includes:
- Solar panels
- Double glazing
- Water storage tanks
- An alternative power supply
Be sure to check with each lender what you need to be eligible for their green home loan.
Which lenders offer green home loans?
Most Australian lenders don't have specific mortgages for green properties, but there are several smaller lenders who do.
Below are some green home loans available at the time of writing.
- Bank Australia. This customer owned bank now offers a Clean Energy Home Loan in partnership with the Clean Energy Finance Corporation. Bank Australia claims to have been carbon neutral since 2011 and puts some of its profits towards a conservation reserve and other environmental and socially conscious projects.
- Regional Australia Bank Sustainable Home Loan. This is a variable rate mortgage that offers incentives for borrowers pursuing sustainable housing who meet the lender's criteria.
- Bendigo Bank Green Home Loan. If you can demonstrate that your building or renovation project is environmentally sustainable you can receive an interest rate discount.
- Hunter United Green Home Loan. You can qualify for this loan if your home has at least three sustainable features, such as solar power, double glazing or a water tank.
- Maleny Credit Union Advantage Plus Home Loan - Special Rate. This small Queensland credit union offers a 0.15% interest rate discount on its Advantage Plus Home Loan if your home satisfies three of sustainable criteria.
A green discount does not mean the cheapest rate
- Keep in mind that the discounted rates for green home loans don't necessarily make these products cheaper than other mortgages. If your priority is saving money on repayments with a cheaper mortgage then a green home loan might not be your best option.
What else do I need to know about green home loans?
- Reduce your environmental footprint. The most obvious benefit of these loans is that you will be able to contribute to a more sustainable future, reducing your environmental impact.
- Interest rate discounts. The main draw card of a green home loan is that you are rewarded with lower interest rates in return for your choice to make your house environmentally friendly. But be aware that these interest rates may not
- Lower bills. By switching to more energy efficient power options, you could potentially save more on your electricity and water bills.
- Strict criteria. Most green loans have a very strict and specific criteria your house will have to meet in order to be eligible. The criteria will differ from lender to lender, and the less environmentally friendly tools your house has, the small array of lenders you will have to choose from.
- Fees and charges. As with any loan, be aware of fees such as redraw facility charges.
Note: The Green Loan Scheme
The Green Loan Scheme was established to encourage Australian residents to reduce their environmental footprint by installing solar panels and other tools in order to reduce water and energy consumption. The scheme has now been abolished by the Australian Government, however, many banks are still encouraging a 'greener' approach through their own special offers and incentives.
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Home Loan OffersImportant Information*
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate(*now 2.59%, drops to 2.49% on 17 Jul)
Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR <= 80% (Owner Occupier, P&I)
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
Buy your home and lock in a low rate for the first two years. Get a $2,500 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 28 August and settle by 30 October 2020.
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