In an effort to encourage the sustainable construction of homes in Australia, the Clean Energy Finance Corporation (CEFC) has unveiled a new scheme that will provide green home loans to interested builders and homebuyers.
Bank Australia is the first mortgage provider to take up the CEFC finance, which will deliver discounted interest rates to qualifying builders and homebuyers.
The new Bank Australia Clean Energy Home Loan will provide eligible borrowers with a 0.4% discount on their financing needs. This will be the first Australian green home loan to use energy efficiency measurement tools to determine eligibility.
The Bank Australia Clean Energy Home will draw on up to $60m in CEFC financing, providing the mortgage-rate discount via its Premium Package Home Loan to mortgages below $1.5m.
There are plans to extend the offer to existing homes in order to provide financing to green home improvements and renovations such as the installation of energy monitoring and energy storage systems, solar hot water, and energy-efficient air conditioning.
The discounted mortgage rate will apply for up to five years for homeowners who buy or build homes that meet a minimum 7-star rating under the Nationwide House Energy Rating Scheme (NatHERS), which rates the energy efficiency of a property based on its design.
Achieving a 7-star rating already exceeds the minimum standards of the National Construction Code. Homes with such ratings require less energy for heating and cooling.
The green home loan will encourage builders and new-home buyers to consider adopting sustainable design principles, said CEFC CEO Ian Learmonth.
"New homes built today will be in use for decades to come. We want those homes to have the strongest energy efficiency and to deliver the smallest carbon footprint possible," he said.
According to the Australian Sustainable Built Environment Council (ASBEC), the property sector accounts for about 23% of the country's greenhouse gas emissions, with about half coming from residential buildings.
This new home-loan offer is a step towards achieving sustainable homes and contributing to the fight against climate change, said Damien Walsh, managing director at Bank Australia.
"We're proud to reward people who choose to make their homes more sustainable through our Clean Energy Home Loan. Working in partnership with the Clean Energy Finance Corporation means we can bring this innovative new product to market sooner, and help more Australians," he said.
A recent study by ASBEC found that the adoption of higher clean energy standards in new residential buildings could translate to energy savings of as much as 25%.
"Cutting energy demand is a low-cost way to decarbonise the property sector and reduce stress on the electricity network. We are looking forward to working with Bank Australia in giving Australians an added financial incentive to choose cleaner, greener options when it comes to their homes," Learmonth said.