The Clean Energy Finance Corporation (CEFC) has launched a new Green Home Loan program. This Green Home Loan is for borrowers who build or buy a home that has a minimum 7-star NatHERS energy rating. This is the first home loan to use home energy efficiency rating as a criteria for eligibility.

Bank Australia is the first Australian bank to offer the scheme funded by the CEFC, which offers 0.4 per cent discount to their home loan rate, and is applicable for 5 years.

This means that a home loan for a median priced house in Sydney of $1M, would equate to a saving of $4,000 per annum (equating to $20K over 5 years).  In addition, the borrower’s house would be valued 10 per cent higher, because it is a seven-star rated home.

Bank Australia will later extend the benefits of the loan to existing homes to finance green home improvements, with solar plus batteries being expected to be the major contributor to achieving a seven-star rating.

There is an increased focus from home buyers on energy efficiency and sustainability features in their homes.

Green home loans will help create new demand for lower emissions housing. Along with lower ongoing energy costs for home owners, home builders will need to meet the market expectation of offering 7 star rated homes.  This reflects the growing concerns from our communities to take steps to counter climate change and tackle ever increasing energy costs.