‘Green loans’ have been around for a few years, but have been in the news recently following the announcement of a new product from one of the ‘Big Four’ banks.
What are green loans, and how could they impact us?
A green home loan encourages borrowers to buy or build their future homes in an environmentally-friendly way. These loans usually offer discounted interest rates for homes that meet certain sustainability and energy efficiency criteria.
To qualify for a green home loan, your home should typically have at least one of these qualifications (these may differ between lenders):
– A rating of 7 stars or higher under the Nationwide House Energy Rating Scheme (NatHERS*)
– A Residential Efficiency Scorecard with a rating of 7 stars or more (excluding 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.’
Launching CommBank’s Green Home Offer in partnership with the Green Building Council of Australia (GBCA), CommBank’s executive general manager of home buying, Dr. Michael Baumann said he hopes it will raise awareness and provide ways to ease both living costs and environmental impact.
“We want to reward new and existing customers who are taking actionable steps to reduce their environmental footprint by investing in homes that are efficient, comfortable, and healthier for them and the environment”, Baumann said.
“We expect all residential homes to be built to these standards over the coming years as we move towards a net zero future.
“We know homes that are well built and energy efficient are good for the environment whilst significantly reducing living costs and improving the wellbeing of homeowners”, he concluded.
Although lenders offer interest rate discounts for green homes, it does not necessarily mean they are the cheapest home loan option, so it is wise to always check with your financial adviser or mortgage broker to ensure that you are making the right choice for your circumstances.
*First introduced in 1993, NatHERS measures a home’s energy efficiency, based on its structure, design and materials, to generate a star rating. The higher the star rating, the less energy needed to heat and cool the home to keep it comfortable. A rating of 6 or above is required in most parts of Australia for detached homes.
