Green Home Loan: Financing Sustainable Homes

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As a nation, Australia is shifting towards a “greener” future and part of this is the introduction of the green home loan by lenders. This cultural change and shift towards ecologically friendly living is also influencing the way people make financial decisions. A recent study by Ernst & Young found that when it comes to how Australians view sustainability:

  • 71% believe brands have a responsibility to make a positive change in the world.
  • 76% say that sustainability is either “very”, “extremely” or “somewhat” important to them when making a purchase decision.

With this in mind, it’s no wonder that a growing number of Aussies are expressing interest in green home loans. But what is a green home loan? How can a green mortgage benefit both the environment and the homeowner? And what options are there for green home loans Australia and its residents can take advantage of?

What is a Green Home Loan?

A green home loan is a type of mortgage that supports environmentally sustainable practices. These loans offer incentives to encourage borrowers to invest in environmentally friendly features for their homes. A green mortgage may offer energy-efficient upgrades or carbon offset programs, in addition to lowered interest rates and flexible repayment terms. In this way, they foster a more eco-conscious approach to home ownership in Australia.  

What Are the Benefits of Green Home Loans?

Green home loans in Australia offer a range of benefits to eco-minded homeowners. These include:

  • Financial incentives, such as discounted interest rates or fee waivers.
  • A reduction in overall energy consumption (leading to reduced energy bills).
  • Minimising a homeowner’s environmental footprint.
  • Support for renewable energy initiatives.
  • Improved water sustainability (due to investment in rainwater harvesting systems and water-efficient fixtures).
  • Eligibility for relevant government incentives and rebates.

Green mortgages offer homeowners a great range of financial benefits while also helping them to adopt an eco-friendlier lifestyle.

What Options Are Available for Green Home Loans in Australia?

 sustainable housing using a green home loan

Australia’s first green mortgage was launched in 2020. Established by Bank Australia with the support of the Clean Energy Finance Corporation, that scheme was so popular that it doubled the expected uptake within the first year. Today, multiple lenders are offering green home loans in Australia. These include:

  • Some of the Big Four Banks (Commonwealth Bank, NAB and ANZ)
  • Smaller regional banks (Bank Australia, RACQ Bank, Regional Australia Bank and Gateway Bank)
  • Independent lenders (Firstmac)

To find out more about which lenders offer green home loans in Australia, talk to a mortgage broker.

What Are the Eligibility Criteria for a Green Mortgage?

Lending criteria will always vary but in general, the house you plan to buy/build will need at least one of the following to qualify for this type of loan:

  • Nationwide House Energy Rating Scheme (NatHERS) rating of 7 stars or higher.
  • Passive House Certification.
  • Residential Efficiency Scorecard with a rating of 7 stars or more.
  • Green Star – Design & As Built score of at least 8 points on the ‘Greenhouse Gas Emissions’ credit.

Building A Sustainable Future with a Green Home Loan

Let’s consider a hypothetical example of how this kind of loan could benefit a prospective homeowner:

Charlie lives on the Sunshine Coast and is committed to building an eco-friendly home. Charlie consults with an experienced mortgage broker, who identifies a lender offering a suitable green home loan. They submit an application outlining how the borrowed funds will be used to build a home with a NatHERS rating of at least 8 stars (which makes it eligible for this particular loan type). The lender, recognising Charlie’s commitment to sustainability, approves the loan and provides favourable terms, including a reduced interest rate.

By choosing a green mortgage, Charlie is able to build a home that is environmentally responsible, boasts long-term energy savings and has increased property value.

Talk to a Broker About Green Home Loans in Australia

To find out more about how a green mortgage could help you achieve your home ownership dreams in a more eco-conscious way, talk to the team at Sunshine Coast Financial Solutions. We’ll happily answer all your questions, explain the various options available and help you identify which green home loan will be the best choice to suit your needs.

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What our Clients Say

My husband and I are very grateful and happy with the service we received from Chris and his team at SCF Solutions. Very professional and kept us up to date with everything. Would not hesitate to use them again or to recommend them to anyone wanting a broker.
Morgan Andrews (Morgo)Morgan Andrews (Morgo)
00:53 01 Apr 22
What an absolute campaign from Chris and Dan to get my loan through. They bent over backwards to get the result we wanted. No doubt best in the industry. Up front, honest and hard working. Would highly recommend the team at SCFS to anyone. Thanks for everything team.
Alexandria MontgomeryAlexandria Montgomery
04:44 27 Mar 22
Jo is absolutely incredible! This is the 2nd time my husband and I have gone through Jo for our home loan and I can't recommend her highly enough. We have had such an easy and positive experience that we now have friends, co-workers and other family that have also approached Jo and were also blown away with her service and how easy she made the whole process of applying for a home loan!All we can say is THANK YOU!
chloe leechloe lee
05:24 25 Mar 22
High recommend Joanne and her team; they have been a major support for us with getting our home loan. They communicated really well and are fast with their replies and know what they are doing. I don't know where we would be without them
Zelko KalicZelko Kalic
04:21 18 Mar 22
Just a massive to thank Chris, Daryl and the team for an absolutely professional, dedicated and efficient effort to secure my loan.They went over and beyond any other services I’ve experienced which has made my dream come true. Cannot recommend SCFC enough for their extraordinary efforts. Thank you 🙏
Joanne SansomJoanne Sansom
02:47 18 Mar 22
Can highly recommend Chris and his team at Sunshine Coast Financial Solutions. Chris always provides a prompt and professional service, nothing is ever too much trouble and always goes above and and beyond. Chris is extremely down to earth and explains things in simple terms. Thanks Chris for all your help you have provided and will most definitely continue to use you and recommend you.
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