- Australians who buy or build green homes will be eligible for a mortgage discount, in a federal push to increase sustainable housing.
- The scheme, financed by the Clean Energy Finance Corporation (CEFC), will see houses with a 7 star efficiency rating or above qualify for a 0.04% discount for five years, or around $7,000 on a $350,000 loan.
- So far Bank Australia, which prides itself on sustainable investment, is the only bank administering the program.
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If you've got a green streak and an eye on the property market, the nation needs you.
In fact, the government is willing to subsidise your mortgage, under a new Clean Energy Finance Corporation (CEFC) scheme designed to increase the supply of energy-efficient homes.
"This green home loan will fill a gap in the market, giving builders and new home buyers a financial incentive to adopt sustainable design principles from the start of the project," CEFC CEO Ian Learmonth said in a release.
"New homes built today will be in use for decades to come. We want those homes to have the strongest energy efficiency and to deliver the smallest carbon footprint possible."
In order to encourage their construction, the CEFC will put up to $60 million to be drawn by banks administering the loans. So far, only Bank Australia has signed on as an eligible mortgage provider.
Its applicants will be eligible for a 0.4% discount over five years. While it may seem small, it amounts to around $7,000 on a $350,000 loan. In capital cities like Sydney and Melbourne, where house prices far outstrip other areas, the savings are likely to be far more significant.
To be eligible for the discount, applicants need certification that the home they are building or the one they are buying has a 7-star efficiency rating under the Nationwide House Energy Rating Scheme (NatHERS), which rates homes from 0.5 to ten. A seven-star design level "materially exceeds" the national minimum construction standards, according to the CEFC.
While every house is different, seven-star homes are generally made of superior materials and are designed to work with their environment in a way which largely negates the need for air-conditioning and heating. For example, features like double-glazed windows and a favourable orientation typically increase a home's rating while a lack of insulation generally lowers it.
"Cutting energy demand is a low-cost way to decarbonise the property sector and reduce stress on the electricity network. We are looking forward to working with Bank Australia in giving Australians an added financial incentive to choose cleaner, greener options when it comes to their home," Learmonth said.
The CEFC is a federal government agency, set up by the Gillard Government in 2012 to increase investment in Australia's green transition. According to its own figures, it has invested $10 billion across the sectors of agriculture, energy, infrastructure, property, transport and waste.
Its tentative foray into the property market is well-intentioned but may need to expand substantially if it's going to move the dial on the $7 trillion sector.