Top Green Home Loans in Australia

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With nearly a quarter of Australian greenhouse gas emissions coming from the property sector, it is no wonder that people are looking for greener options when it comes to owning homes.

A recent CSIRO study found that more than nine million homes in the country do not meet the 7-star Nationwide House Energy Rating Scheme (NatHERS) rating that deems a property sustainable and green. In 2020, only 10% of new homes built received a 7-star rating or higher.

It comes as no surprise that a growing number of Australians want to make their homes more sustainable in order to help with the climate crisis.

On this page:

What is a green home loan?

A green home loan is a type of loan that encourages borrowers to buy or build their future homes in an environmentally friendly way. These loans usually offer discounted interest rates for homes that pass a form of eco-friendly certification.

 To qualify for this green home loan, your future home should typically have at least one of these qualifications**:

  • A 7 stars or higher rating under NatHERS.
  • A Residential Efficiency Scorecard with a rating of 7 stars or more (excludes the impact of installed/installing rooftop solar).
  • Passive House Certification.
  • Green Star, Design & As Built score of 8 points or more on the credit ‘15 Greenhouse Gas Emissions.’

**Specific qualification criteria will differ from lender to lender.

Green home loans

Now that you know what a green home loan is, let's meet the lenders who offer loans at special rates for borrowers who commit to building or purchasing homes that are green.

Loans.com.au - Green Home Loan
  • Variable rates starting at 2.08% p.a. (2.36% p.a. comparison rate*)
  • No ongoing fees
  • $520 upfront fee

The Green Home Loan 90 from loans.com.au offers low variable rates from 2.08% p.a. (2.36% p.a. comparison rate*) for homes that have a 7.0 star NatHERS rating or higher. This loan has a maximum LVR of 90% for loans from $50,000 to $2,000,000. If you are considering buying a green home that was built in the last 12 months, this loan might be a good choice.

Gateway Australia - Green Home Loan
  • Variable rates as low as 1.99% p.a. (2.34% p.a. comparison rate*)
  • 0.15% discount off premium package variable rate
  • $299 yearly fee
Find out more

The Green Home Loan from Gateway Australia offers an interest rate discount of up to 0.15% for green homes that meet at least three of Gateway’s environmentally friendly features criteria. Variable rates begin at 1.99% p.a. (2.34% p.a. comparison rate*) for a minimum loan amount of $150,000 with a maximum LVR of 80%. Borrowers will also be able to split the loan between a variable and fixed rate, and unlike some other loans the discount offered is not removed after a couple of years.

Bank Australia - Clean Energy Home Loan
  • Variable rates as low as 2.50% p.a. (3.01% p.a. comparison rate*)
  • Optional mortgage offset account
  • $350 yearly fee
Find out more

Winner of a 2021 Mozo Experts Choice Award in the Green Home Loan category^, Bank Australia’s Clean Energy Home Loan is a home loan package that offers a 0.20% interest rate discount for the first five years. This loan is available for homes that have 7-star or more NatHERS rating or homes that have made ambitious green updates in the last 12 months. Variable rates start as low as 2.50% p.a. (3.01% p.a. comparison rate) for loans of $150,000 and more with a maximum LVR of 90%.

Regional Australia Bank - Sustainable Home Loan
  • 2.79% p.a. variable rate (2.83% p.a. comparison rate*)
  • No ongoing service fee
  • $250 upfront fee
Find out more

The Sustainable Home Loan from Regional Australia Bank’s variable rates start at 2.79% p.a. (2.83% p.a. comparison rate*) for loans of $100,000 and more with a maximum LVR of 95%. One thing to be mindful of is that the environmentally friendly certification and standards are quite rigorous, so make sure to check out the criteria on their site. Unlike some other loans that are available to first time home buyers this loan is only for existing homeowners.

Firstmac - Green Offset Variable Home Loan
  • 5 year intro rate of 2.34% p.a. (2.63% p.a. comparison rate*)
  • Free extra repayments, redraw facility and offset account
  • $720 upfront fees
Find out more

This green home loan could suit those looking for a full-featured home loan with a free offset account. Borrowers typically receive a 2.34% p.a. (2.63% p.a. comparison rate*) variable rate for loans from $50,000 to $2,000,000 with a LVR of 80% to 90%. However, this rate is only available for the first five years, and increases by 0.40% after that. This loan is best for new properties built in the last 12 months that have a minimum NatHERS star rating of 7.0.

Green Home Loan FAQs

What is NatHERS?

Nationwide House Energy Rating Scheme (NatHERS) is a rating system houses receive based on how energy efficient and environmentally friendly the home is. Using research by CSIRO, the rating takes into consideration how much energy the design of a house will need for heating and cooling.   

Most construction plans come with a rating on them from a scale of 1-10. The more stars the house has, the more efficient it is. Most green home loans require a home to have at least a 7-star rating to qualify for the loan.

How does my home qualify for a green home loan?

Each green home loan lender has different criteria for their loans. If you want to check if your home qualifies for a specific loan, your best option is to check the product disclosure statement and information on the lender’s website for specific requirements.

What is the difference between a green loan and regular home loan?

The main difference between a green home loan and a regular home loan is that a green loan is exclusive to homes that qualify certain environmentally friendly criteria put forth by the lender.

Should I get a green home loan?

Getting a green home loan is great if you are environmentally cautious and want to do your part in the fight against the climate crisis. 

However, even though lenders offer interest rate discounts for green homes, it doesn’t mean they are the cheapest home loan option. If your priority is finding the most affordable home loan out there, then a green home loan might not be your best option.

When comparing home loans you should consider things like:

  • Interest rates
  • Home loan fees
  • Money-saving features like an offset account or being able to make extra repayments

But if you are already considering investing in an eco-friendly and energy efficient home, getting a green home loan might be a good choice.

If you want to live a green loan lifestyle, consider checking out the different personal green loan lenders in the market. Or check out ways to make your finances greener.

* 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, loan amount and term entered. 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.

^See information about the Mozo Experts Choice Home Loan Awards

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