With global and societal attitudes shifting towards a more sustainable approach to living, certain banks and financial institutions have brought in the green home mortgage. What are these? How does one qualify for one? What are the pros and cons? What different types of green home mortgages are available?
What is a Green Home Mortgage?
A green home mortgage is a type of home loan offered by certain lenders. It rewards borrowers for building, buying or renovating a property to make it more energy-efficient and sustainable. Some of the lenders that offer this type of mortgage include:
- Commonwealth Bank
- Gateway Bank
- Bank Australia
- Regional Australia Bank
- And more!
Get in touch with us here if you would like to check whether a specific lender you want offers a green mortgage.
How do I Qualify for a Green Home Morgage?
Each lender and loan option would have its own requirements, so it is worth going into detail with the lender of your choice to determine what is required to receive a green home mortgage. In general, however, these types of mortgages have a few specific requirements that can make a homeowner eligible for a green home mortgage:
- Size and home function
- Orientation (for heating and cooling based on the sun's position)
- Environmentally friendly building materials
- Solar Panels
- Double Glazed/Low-Emissivity Coatings
- Rain/Storm Water Tank
- Energy Efficient Electronics (Lights, Heating)
What are the Pros and Cons?
There is a range of upsides with taking on a green mortgage:
- Lower interest rates
- Lower initial deposit (banks allow a higher loan to value ratio)
- Extra funding and rebates from banks and governments to create these home improvements
- Contributing towards a cleaner environment with a reduced carbon footprint
- Borrowers may qualify for larger loan amounts with a green loan
- 3 out of 5 prospective home buyers factor energy consumption into their purchase of a home
There are some drawbacks that borrowers need to consider:
- Not all lenders offer green loans, meaning that there are less options to choose for the right loan
- Increased hassle in ensuring that the property is eligible for these green home mortgages, especially with construction and renovations
What Different Types of Mortgage are Available?
Different lenders offer different types of green home mortgages. Check out a couple in the table below:
|Commonwealth Bank||Click Here|
|Gateway Bank||Click Here|
|Bank Australia||Click Here|
|Regional Australia Bank||Click Here|
These mortgages have the potential to save you thousands over the course of your mortgage through interest repayments, whilst also helping the planet. Are you are looking for help in determining which is the best green home mortgage for you? Book a free consultation with our award-winning property team here.