What do you need to get a Green Home Loan?
Green home loans reward borrowers with discounted interest rates, cashbacks, and rebates. Of course, everyone wants one. The most common question I get is, "What do I need to get a Green Loan?" There are multiple pathways to qualify, here are 6 of the most common.
1. Solar
Solar is merely the tip of the iceberg to creating energy efficiency, but it can entitle you to a Green Loan. Typically, there is a minimum requirement relative to the size of your home. You can refinance your home loan to a Green Home Loan when you add the solar system, or you can even refinance to a Green Loan if you have solar panels already.
2. NatHERS (Nationwide House Energy Rating Scheme) 7* Rating
At the moment, you have a small window of opportunity to get a Green Loan with a NatHERS 7* Rating; however, expect this to change. Green loans reward customers who have higher than minimum standards of energy efficiency. The National Construction Code recently changed to require all newly built homes to have a 7* NatHERS rating, so the banks will require a higher NatHERS rating or a package of features to demonstrate higher energy efficiency.
3. Green Star Rating
Homes that have a Green Star Rating by the Green Building Council of Australia are entitled to a Green Loan; however, banks have different certification requirements for different types of loans, and the Green Building Council has recently updated its sustainability rating methodology, so it is important to stay abreast of the detail.
4. Residential Efficiency Scorecard
The Residential Efficiency Scorecard rates your home's energy use and comfort and provides tailored recommendations for improvements. Some banks require you to have a score above a certain level, while others require an improvement in score through the addition of energy-efficient features.
5. Passivehaus
Originally developed in Germany in the 1990s and now applied throughout the world, a certified Passive House undergoes a quality assurance process that ensures it is built as designed and meets the comfort standards required by the Passivehaus standard.
6. Energy Efficient Additions
There is a comprehensive list of energy additions that will give you access to a Green Loan. You typically have to add two or three to qualify for the discounted interest rates. These can include:
- Solar battery storage system
- Rain/stormwater tank
- Certified double-glazed windows
- Solar hot water system
- 5 Star+ gas or electric heating
- External awnings
- Solar pool heating system
- Home insulation that meets government standards for the geographic area
It is important to note that each bank has its own requirements or package of requirements to qualify for a green loan. Additionally, having the highest standard of energy efficiency will not always equate to the lowest interest rate or best loan for your circumstances. It is also important to be aware that Green Loans are a new and rapidly developing field. Therefore, not only are the sustainability rating tools constantly evolving, but bank policy is also constantly changing to meet the expectations of a rapidly changing world.
At Sustainable Home Loans, we know we could potentially have chosen a simpler area of finance, but we love being at the forefront of an area that can have real impact in creating a more sustainable world.
Please get in touch if you need help to navigate the process via email or click the link below.