Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
What are green homes?
Green homes don’t just help save the environment. They can also save you money in the long run.
According to the Australian Sustainable Built Environment Council (ASBEC), the property sector accounts for about 23% of Australia’s greenhouse gas emissions. Because of this, a lot of people are trying to reduce their carbon footprint by living in environmentally friendly or ‘green’ homes.
But what exactly is a green home? And what is a green home loan?
A ‘green home’ can have lots of definitions, but it’s generally accepted as one that is ‘environmentally sustainable', and has a high energy-efficiency rating and a number of renewable technologies installed, such as solar panels. In Australia, a home is generally considered to be ‘green’ by the Clean Energy Finance Corporation (CEFC) if the property has a Nationwide House Energy Rating Scheme (NatHERS) rating of 7 stars or higher.
This isn’t that hard to get these days as a lot of homes are quite energy efficient.
There’s no one standardised set of things your home needs to be considered green, but it’s a safe bet to include any (or several) of the following:
Solar or gas hot water systems
Solar panels, solar battery storage systems
Solar pool heaters, heat pump systems
Rainwater tanks, greywater treatment systems
Energy-efficient LED lights in over 75% of the property
Certified double-glazed windows
Underfloor, wall and ceiling insulation that meets the National Construction Code
Electric vehicle charging port(s)
Real-time energy monitoring systems
It’s possible you’re already thinking about getting a green home or doing some green renovations without even realising it. According to the Department of Energy, 60% of Australians say energy efficiency would be a factor when buying a home.
Aside from the long-term savings you can make, it’s inevitable that you’ll need an energy-efficient home. As Australia eventually moves towards net-zero emissions, the vast majority of houses will need to be sustainable, so you might as well get ahead of the curve. Plus, modelling by CSIRO found investment in sustainable homes by 2030 could create thousands of new jobs and save more than $600 million on their energy bills, so you’d be helping the economy too.
Rising energy bills are a major concern for almost all households, but ClimateWorks Australia identified potential energy savings as high as 25% for green homes. Other studies found energy-efficient green homes use 66% less electricity and 51% less water on average. These savings come from the exterior and interior design of the home (like the flooring, walls and insulation) as well as the additional features, like solar panels and water tanks.
Solar panels, for example, can save tens of thousands of dollars in energy bills over their lifespan. Solar hot water can also supply up to 90% of your hot water, leading to huge savings.
Those exterior installations are seen as a major barrier to going green, however, as they can be quite expensive.
Energy retailer Tango Energy recently found 51% of Australians who want to live in a green home are put off by the price, and it’s not hard to see why. Solar panels for example can cost anywhere between $2,800 and $14,000 depending on your house and the size of the panel, according to the Clean Energy Council, while rainwater tanks can also cost upwards of $1,000 to install.
When you factor in the interior costs mentioned above and the general design of the home, the costs can be higher. Hipages says the building costs for a "medium standard" house are around $1,300 to $1,680 per square metre, while a non-standard green home could cost $2,100 – $2,300 per square meter from scratch.
Based on the average home size of 235.8 square meters, that's around $146,000 extra for the build. Fortunately, certain home and construction loans can help with these costs.
A green home loan is a home loan specifically tailored towards energy-efficient homes. If the home meets a certain energy rating or contains certain technologies, a green home loan usually offers a discounted interest rate and lower fees to encourage people to adopt sustainable living practices and help them manage the (often) higher upfront costs.
The same can be said for construction loans, which give lower rates and fees for those who are undertaking substantial renovations to add green tech to their homes. Depending on how much you’re borrowing, a green home or construction loan could save tens of thousands of dollars over the life of the loan, depending on the discount. Local, state and federal governments also offer lots of different rebates - NSW for example offers 40% and 50% discounts on energy-efficient fridges and televisions.
At loans.com.au, we now offer highly competitive green home and construction loans, providing substantial discounts on interest and fees for those looking to reduce their household carbon footprint. To qualify for these green loans, your home must achieve a 7-star energy efficiency rating, provided by an accredited NatHERS assessor.
If you’re thinking about turning your home green, then check out our green loan products and chat to one of our expert lending specialists today to find out more.
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.