| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.99% p.a. | 6.51% p.a. | $2,396 | Principal & Interest | Variable | $0 | $530 | 90% | |||||||||||
5.84% p.a. | 5.89% p.a. | $2,357 | Principal & Interest | Variable | $0 | $500 | 60% | |||||||||||
5.88% p.a. | 6.38% p.a. | $2,367 | Principal & Interest | Variable | $350 | $0 | 90% | |||||||||||
5.94% p.a. | 5.99% p.a. | $2,383 | Principal & Interest | Variable | $null | $null | 80% | |||||||||||
6.14% p.a. | 6.85% p.a. | $2,434 | Principal & Interest | Variable | $0 | $720 | 90% | |||||||||||
6.15% p.a. | 6.43% p.a. | $2,437 | Principal & Interest | Variable | $299 | $0 | 80% |
What are green home loans?
Green home loans, sometimes known as eco-friendly or sustainable home loans, are financial products designed to incentivise environmentally responsible housing choices.
These loans typically offer lower rates to homeowners who own or are buying a home that meets certain energy-efficiency metrics, thereby reducing its owner's carbon footprint.
Many green home loans can also be used to fund the construction or renovation of energy-efficient, environmentally friendly homes.
How do green home loans differ?
Green home loans usually come with features that can help borrowers carry out environmentally-friendly improvements in their homes. Here are some of the most common features of a green home loan:
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Discounted or lower interest rate
Perhaps the most attractive feature of a typical green home loan is its interest rate. These products generally offer lower rates to borrowers with sustainable homes, or those who invest in energy-efficient home improvements. Such improvements can include adding solar panels, environmentally-friendly insulation, energy-efficient heating and cooling systems, and double-glazed windows. -
Flexible repayment terms
Many green home loans offer greater flexibility when it comes to repayment terms than traditional mortgages. Such flexibility can help ease the financial burden associated with making eco-friendly upgrades. Some green home loans can even take the place of a construction home loan, drip feeding the funds needed to build or renovate a property and thereby saving a borrower interest. -
Eligibility tests
Unlike a typical home loan borrower, a person taking out a green home loan will need to prove their property is eligible. This might mean making a certain number of sustainable upgrades or securing certification from an approved organisation.
Is my home eligible for a green mortgage?
To qualify for green home loans, borrowers must own or buy a home that meets certain qualifications or implement a specific number of sustainable upgrades.
Exact requirements will differ from lender to lender but the certifications that can qualify a home for a sustainable mortgage are commonly provided by either the Nationwide House Energy Rating Scheme (NatHERS) or the Green Building Council of Australia.
NatHERS
NatHERS rates a building's eco-friendliness out of ten stars, with those rated seven stars or higher generally eligible for a green home loan.
Many states in Australia demand new homes boast a NatHERS rating of seven stars or higher, so if you own or are building a new home, you might qualify by default.
Green Star
The Green Building Council of Australia can also certify that a home is sustainable with its Green Star Homes Certification.
Fewer lenders accept this certification than do a NatHERS star rating. CommBank is among those that will consider a home's Green Star rating.
Sustainable home improvements
Certain lenders might also consider a home eligible for a green mortgage if a specific number of 'sustainable' improvements have made within a set timeframe.
Which lenders offer green home loans?
Plenty of financial institutions offer green home loans. Here are a few that do, and you can find more by perusing the table above:
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CommBank
CommBank's Green Home Offer provides borrowers with a discounted standard variable rate loan when they build, buy, or renovate their home to be more sustainable, climate resilient, and energy efficient.
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NAB
NAB offers lower interest rates and discounted Lenders Mortgage Insurance (LMI) to eligible 'sustainable' home loan customers.
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loans.com.au
loans.com.au's Green Home Loan is available for homes that are less than 12 months old and have a NatHERS rating of seven stars or more. The discount is available for the first five years of the loan. The lender also offers discounted interest rates for homes with solar panels.
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Bank Australia
Bank Australia offers three green home loan products, offering with different interest rates for homes that are more sustainable than others. Its lowest rate green home loan requires a home to have a 7.5-star NatHERS rating and solar panels, while the highest rate green home loan is available to borrowers who have made at least three sustainable home improvements within the last 12 months.
What home improvements can help secure a green home loan?
There are plenty of home improvements that can help save homeowners money, whether that's by reducing the size of their power bill or making them eligible for a green home loan. Such improvements include adding:
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Solar Panels
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Insulation
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Energy-efficient appliances
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Double-glazed windows
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High-efficiency heating and cooling systems
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Water-saving fixtures
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Smart home technology
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