What Are Green Home Loans? Sustainable Loan Options
Want to find out more about green home loans? Green loans are designed to reward borrowers for investing in more sustainable property. This can include buying, building or renovating an energy-efficient home. A green home loan can make it easier for you to get a loan, and they provide additional benefits. Plus, you are doing your bit to create a greener future for the planet.
What Are The Benefits Of Green Home Loans?
Green home loans offer multiple benefits to people wanting to purchase or renovate property while contributing to better outcomes for the environment.
Lower Interest Rates
Compared to your standard home loan, green home loans can offer lower interest rates to borrowers. This means that in the long run you will pay less interest on your loan, saving money and helping you to repay that loan faster.
Some providers will also offer reduced fees when you choose a green home loan instead of a normal option. Fees related to home loans can really add up over time, so this can be a big benefit in saving money.
When you choose a green home loan, you're making a commitment to buying, building or renovating a sustainable property. This means that you’re putting measures in place to ensure that your new home produces less carbon emissions that the average Australian household. This can include more effective options for heating and cooling, better ventilation and insulation, energy-efficient appliances, and solar panels to generate cleaner energy.
Investing in a green home now can improve your financial outcomes in the long run. As properties with sustainable features gain popularity, your home could become more valuable if you invest in energy-efficient features and appliances.
Why Do Banks Offer Green Loans?
Green loans are offered as a way for banks to encourage more sustainable practices in their customers. Increasingly, banks are seeing the importance of environmentally friendly investments and sustainable financing. Offering green loans enhances a provider's image with the public as well as encouraging people who want to live more sustainably to work with them.
How Can I Get Green Loan?
Green loans are only available from a few different lenders and it’s important to do your research before committing to any kind of loan.
You can compare green home loans yourself or speak to an expert to help find the best green home loan for your needs. Note that not all loan types will be called 'green'- other common names include 'clean energy' loans, 'sustainable' loans, and others. The green loan space is becoming increasingly competitive and there are more options now than ever before.
Always read the full product disclosure statement (PDS) and other information on the loan and consider the upfront rates and fees.
Remember that the lending criteria for this kind of loan is more strict and you will need to prove that your home is truly more sustainable in order to qualify. Additionally, switching to a different loan down the track could be more difficult.
Before applying for a loan, it's a good idea to check your credit score and see how this could affect your chances of approval for a home loan.