Cheaper loans for green homes

G Magazine

Mortgages on green homes can be significantly cheaper

Small house made of grass

Credit: iStockphoto

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Around the world, banks have announced green products for their customers.

Such big names as Barclays, Credit Agricole, Wells Fargo and Caisse d'Epargne have all announced them in their respective markets, signalling what could well be one of the strongest trends in retail banking.

Australia is no exception.

Anyone taking out a Westpac home, equity or investment loan, for example, receives a booklet of discounts for a variety of environment-friendly products, including rainwater tanks, solar panels and showerheads.

However, it was Bendigo Bank that set the agenda in Australia six years ago when it launched the first in a series of green home and personal loans. The aim was to reward customers for energy sustainable home improvements, and to build environmentally and energy efficient homes.

It's easier being green

Bendigo's Green Home Loan is priced at a 0.50 per cent discount to the bank's standard residential variable rate. Customers taking out a green home loan are also exempt from the $8 a month service fee. The result: anyone with a $200,000 green loan saves over $1,000 a year.

Bendigo's green home loans aren't just for new homes either.

The loans are also available for people with an existing mortgage who roll out a major retrofit of their home to bring it up to a five star standard.

It can cover the installation of, for example, grey water treatment systems, double glazing and water storage tanks, and customers can borrow up to 97 per cent of the property value.

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