Green home loan options grow for eco-friendly borrowers
As the impact of climate change becomes more difficult to ignore, a number of Australian home loan providers have responded by introducing discounted home loans for borrowers with eco-friendly homes.
In the past 12 months, six new green home loans have appeared on the market, taking the number of green mortgage products tracked by Mozo from three to nine.
The growing list of options will come as good news to the many Australians who have been making an effort to minimise their impact on the environment.
“It’s great to see a significant increase in green home loans available to borrowers, as lenders look to capitalise on the growing demand for green personal finance products,” said Mozo spokesperson, Tom Godfrey.
As the name suggests, green home loans are exclusively available to borrowers whose homes meet certain environmentally-friendly requirements.
This means scoring a minimum of 7 stars under the Nationwide House Energy Rating Scheme (NatHERS) or Residential Efficiency Scorecard certification. Home evaluations are conducted on-site by an accredited assessor, who will focus on things like:
- Solar panels
- Hot water systems
- Lighting
- Cooling systems
- Heating systems
- Window size and orientation
- Air leakage
- Showers
- Wall / floor material and insulation
- Pools and outdoor spas
“The good news for borrowers is that green home loans offer some very competitive interest rates, so going with a green option could not only help save the environment, it could help you save money as well,” said Godfrey.
Among green home loans tracked by Mozo, one of the lowest rates is offered by digital lender loans.com.au. It offers rates as low as 3.63% p.a. variable rate (4.05% p.a. comparison rate*), which is 89 basis points below the average non-green variable rate of 4.52% p.a..
On an average $400,000 owner-occupier loan paying principal and interest over 25 years, that could equate to savings of up to $59,215 on payable interest.
For more information on mortgage and lending trends, visit our home loans statistics page. And for an idea of where interest rates currently sit, visit our home loan comparison page, or browse the selection below.
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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