As the world grapples with adverse climatic conditions fanned by humans; today, people finally understand the gory implications of climate change and global warming, and many have decided to battle these conditions by adopting environment-friendly habits and home designs.

Yes, there is a spurt of environment-friendly constructions in Australia and across the world. It starts with small changes, such as allowing more natural light in your home, moving on to more significant steps such as the Tesla Tiny House that was on tour in Australia recently. Gorgeous to look at, comfortable to live in, and powered by 100% renewable energy, the house features technology that can be used to create similar homes, cost-effectively, in the future.

green home loan for eco-friendly houses

During the same time span, Elon Musk, CEO and Product Architect at Tesla, changed the lives of South Australians by installing the world’s largest lithium-ion battery in under 100 days to beat their blackout blues and turned the state into a renewable energy leader.

Small changes make a big impact

Whether you are motivated to do the right thing for the environment or motivated to save money, either way, incorporating rooftop solar panels to take your house off the grid or harnessing renewable energy in other ways, apart from using energy-efficient appliances, can lead to big, encouraging changes over time, in your wallet as well as the environment.

To achieve energy-efficiency in households and promote a positive change towards sustainable living, a few years back, the government had introduced the Green Loan Scheme to make it more affordable for Australians to build ‘green’ homes. While the program was scraped off, many banks across the country continue to offer incentives to people who choose to construct energy-efficient homes.

Climate-friendly mortgages

Being environmentally conscious in Australia pays in many ways – not only do you set an example by reducing your carbon footprint and saving on your energy bills, but you also get access to climate-friendly mortgages or green home loans, by several environment-friendly lenders.

Yes, many lenders, such as Bendigo Bank, Maleny Credit Union, Hunter United, Regional Australia Bank and Bank Australia, provide green home loans to borrowers who meet specific criteria such as receiving a seven-star rating, installing solar panels or building an alternative power supply, etc.

For example, apart from meeting the minimum environmental standard required in your state, Bendigo Bank requires you to install at least two items from double or triple glazing, solar hot water heater or heat pump, water-storage tanks (minimum 2,500 L capacity), and roof and wall insulation, apart from an alternative source of power supply. For making these environment-friendly renovations, the bank offers a discount on the standard variable interest rate and a waiver of some of the upfront and ongoing costs.

Bank Australia, on its part, helps home owners build eco-friendly features by providing them with an ‘eco-pause’ or a three to six-month repayment holiday for environmental upgrades as part of their basic home loan.
Hunter United offers a 0.09% discount on their basic variable interest rate if you borrow a minimum of $100,000. Additional criteria include installing any three environment-friendly features listed on their website such as PV panels or wind turbine, wall insulation, solar power, solar hot water, etc.

Another interesting product is the solar loan offered by the Maleny Credit Union for the specific purpose of purchasing and installing PV panel or solar hot water systems. Under this scheme, one can borrow between $3,000-$20,000 for a maximum term of 10 years. Free additional repayments and redraws are included.

Think Green. Save More

It goes without saying that each green loan is different and a discounted deal is not always the best deal available in the market. While taking a green home loan is cheaper than taking a personal loan for funding environment-friendly upgradations to your house, at times, the green discount is offered on a more expensive home lending product than a basic home loan. Thus, unless you need all the features in the upgraded loan, you could be paying much more, despite the discount.
‘Going green’ can offer several benefits, such as discounted interest rates, reducing your energy and water bills, enhancing your property and reducing your carbon footprint. However, fees associated with setting up the account and hidden costs could turn the situation around for your finances. It is recommended to minutely compare home loans to avoid paying more than you should. You can always contact a mortgage broker who will guide you to the best-fit loans for your situation.


By Vidhu Bajaj,
HashChing Content Writer



HashChing is helping Australians by providing access to pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

We already have your details. Please click here to login.