How do I qualify for a green home loan?
How can you take advantage of a green home loan? Check out the article below outlining the important things you need to know.
If you’re building or buying a green home, you could be eligible for a mortgage with discounted rates called a green home loan. This loan encourages borrowers to buy or build a more sustainable and energy-efficient home.
So, how can you take advantage of a green home loan? Check out the article below outlining the important things you need to know:
How can I qualify for a green home loan?
Every lender has a different criterion and building requirements for their green home loans. In addition to the typical eligibility requirements like being at least 18 years old and an Australian citizen or permanent resident, to qualify for loans.com.au’s green home loan, your property must be:
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Less than 12 months old
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Have a NatHERS certificate from an accredited assessor
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Have a 7.0-star rating or higher displayed on the NatHERS certificate
The Nationwide House Energy Rating Scheme (NatHERS) is a star rating system out of ten that rates the energy efficiency of a home.
Star ratings are based on information about the home's design and layout, construction method and materials, and the amount of artificial heating or cooling needed to live comfortably throughout the year.
What affects the NatHERS 7.0-star rating?
A NatHERS Accredited Assessor will use a software to calculate the overall thermal performance of the home. The software will account for the following:
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Size and function of rooms
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Size and specification of openings
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Building materials/windows/products
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Type of construction
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Dwelling orientation
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Location
It will calculate how much energy the house needs to maintain a comfortable temperature. The total estimated annual heating/cooling requirements are then converted to a star rating out of 10.
NatHERS star rating explained
Homes with a higher star rating are considered more comfortable and cheaper to run than homes with a lower star rating. To get a better understanding of the system, here’s what the different NatHERS ratings mean as a homeowner:
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0-star NatHERS Rating – Homes with a 0-star rating are considered very uncomfortable due to their poor insulation. It also means it’s more expensive to keep cool during the summer and warm in winter.
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1- to 5-star NatHERS Rating – Although better than a 0-star rating, a 1-star to 5-star house rating could still point to a poorly insulated home that could lead to more expensive cooling and heating costs.
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6-star NatHERS Rating - This indicates good, but not outstanding, thermal performance. It was the previous standard for Australian households.
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7-star NatHERS Rating - This is the minimum standard in Australia. A 7-star rating means your home’s insulation is optimised but still requires some mechanical heating and cooling.
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8- to 10-star NatHERS Rating – A home with an 8- to 10-star rating would have incredible insulation. A 10-star rated home may not need any artificial cooling or heating to keep you comfortable.
If you want to take advantage of designing a new home, NatHERS has 7-star house plans available on their website, which outlines building specifications, materials, appliances, and site orientation that have been architect-designed and tailored to suit different climates across Australia.
Who can get green home loans?
At loans.com.au, there are green home loans available for different kinds of home buyers. There are green home loans for owner occupiers, investors, and home construction. These loans have all the features you can expect from the typical home loan but with discounted rates for five years.
This is a great opportunity for homebuyers and investors to save money on their mortgage while being mindful of their environmental impact.
What are the pros and cons of a green home loan?
The main advantage of a green home loan is the lower interest rates. You could save thousands on your mortgage with the lower rates during the discounted period. When you get a green home loan from loans.com.au, you’ll also get useful loan features like redraw facilities, an offset sub-account, and additional repayments which can help you lower the loan cost even more.
In addition to the environmental benefits of owning a green home, you’ll also see huge savings on your heating and cooling bills. Overall, you can save money on your mortgage and home maintenance costs with a green home.
The biggest disadvantage or obstacle to a green home loan is meeting the requirements. Figuring out how to meet the energy-efficiency criterion could be difficult, especially if there aren’t many 7-star NatHERS homes already built in your desired suburb.
Building a green home could also be challenging, but the advantages of a green home loan and the future benefits of owning an energy-efficient house can outweigh the cons.
Want to apply for a green home loan?
Apply online to get started as soon as possible! We have a range of green home loans for you to choose from. For more information you can get in touch with our friendly lending specialists at 13 10 90 or arrange a call at your earliest convenience.
Find out in under 2 minutes if you qualify for one of our low rate home loans.
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About the article
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.
