Can a NatHERS certificate help you save on your home loan?

Many Australian homes were built before stricter property energy standards were implemented. This means that by today's standards, millions of Aussie homes have subpar energy performance and waste energy.

Properties with poor energy performance adversely impact the energy grid, the economy and worst, our environment. The Australian Government says homes consume 24% of the country's electricity and produce over 10% of total carbon emissions. With growing concerns about the climate, improving energy efficiency is crucial. Especially since people are increasingly seeking greener ways to own and build homes.

Can you get rewarded for improving the energy performance of your home? Absolutely.

Introducing the New 7-Star Rating Standard

Energy usage is an important sustainability metric. To help people improve their home's energy performance, the Australian Government has introduced a minimum 7-star energy rating for all new homes under the Nationwide House Energy Rating Scheme (NatHERS). This rating, based on the new National Construction Code (NCC 2022), demonstrates how well a home meets today's energy requirements. The rating system is being adopted by all Australian states and territories starting from 1 October 2023.

How Does the NatHERS Rating Work?

A homes energy rating is determined by an assessor who issues a NatHERS certificate. The higher the rating, the less energy required to heat and cool the home. At the highest end of the scale, a house with a 10-star rating means no artificial heating or cooling is needed. Driven by leading CSIRO science, the scheme will help Aussies buy and build more energy efficient, resilient and comfortable homes.

Benefits of Improved Energy Performance

Living in an energy-efficient home offers many benefits:

• Environmental Protection: Using less energy in your household preserves finite resources, reduces reliance on fossil fuels and cuts carbon emissions.
• Save Money: Minimising energy consumption helps you spend significantly less on your energy bills. It can potentially also help you qualify for green loans with discounted rates.
• Increased Comfort: Energy-efficient homes work with the environment, not against it. Quite simply, in summer, the house is cooler, and in winter, it's warmer.
• Increased Property Valuation: Energy-efficient homes are growing in popularity as people look for real ways to save money and reduce their environmental impact.

Achieving a 7-Star Rating

CSIRO data shows that just 21% of new homes got a 7-star rating in 2023. This means almost 80% of existing housing stock does not meet the new standards. According to CSIRO data, energy production is the largest contributor to Australia's carbon emissions. In a typical household, 40% of energy is used for heating and cooling. The NatHERS 7-star rating will help Australian homes cut energy usage considerably.

In the 2023/24 budget, the Australian Government allocated $1.3 billion to establish the Household Energy Upgrades Fund. The Clean Energy Finance Corporation (CEFC) receives $1 billion from this fund to help Australians buy or build energy efficient homes with a 7-star NatHERS certificate.

Saving on Your Home Loan

CEFC has partnered with loans.com.au to offer low-cost 'Green Home Loans' to Australians who want to own a sustainable home. A Green Home Loan is a variable rate home loan with a 5-year discounted rate. It is offered to borrowers who buy, build or renovate a residential property with a NatHERS 7-star certified rating.

How to Build or Renovate Sustainably

Practical guidance about how to build or renovate a sustainable home is available at Your Home.

Improving your home's energy performance is a smart way to save, not just on your energy bills but also on your mortgage repayments. A NatHERS certificate helps you qualify for a green home loan, which is similar to a variable rate home loan but with an eco-friendly discounted rate for the first five years of the loan term. If you want to take advantage of a green home loan, get in touch with our friendly lending specialists by calling 13 10 90 or arrange a call here to start saving today.