What is a green home loan?

When it comes to Green Home Loans, most of the major banks can offer these as a “Top-up” to your existing home loan.

These Top-ups allow you to borrow additional funds on top of your existing mortgage for the purpose of making sustainable improvements to your home (subject to the banks credit criteria).

Here’s a brief introduction:

ASB's "Better Homes" Home Loan - Up to $80,000 at 1% interest over 3 years.

ASB offers the "Better Homes" top-up home loan, featuring a low-interest rate of 1% for loans of up to $80,000 over three years.

This loan can be used for various sustainability improvements, including heating, insulation, solar panels, double glazing, and electric vehicles.

ANZ's "Good Energy" Home Loan - Up to $80,000 at 1% interest over 3 years.

ANZ provides the "Good Energy" home loan, offering a low-interest rate of 1% for up to $80,000 over three years.

This loan is specifically designed to finance energy-efficient upgrades under 4 different categories, energy efficient upgrades, clean transportation upgrades, solar panels, solar batteries and rainwater tanks.

BNZ's "Green Home Loan" Top Up - Up to $80,000 at 1% interest over 3 years.

BNZ offers "Green Home" top-up loans, allowing homeowners to borrow up to $80,000 at a low-interest rate of 1% for the first three years. The loan can be used for sustainability improvements, including insulation, solar panels, rainwater tanks, and financing electric or hybrid vehicles, electric bikes and electric chargers.

Kiwibank's "Sustainable Energy" Home Loan - Up to 10 years PLUS cash contribution on floating rate.

Kiwibank provides a "Sustainable Energy" home loan. The maximum will be determined by their affordability criteria and is on the floating interest rate.

For loans over $5,000, they offer a cash contribution of up to $2,000 towards your sustainable energy system's cost over four years: $800 after the first year and $400 annually for the subsequent three years.

It covers a slightly broader range of sustainable energy systems such as solar power, small-scale hydro, wind energy and geothermal resources. 

Westpac's "Greater Choices" Home Loan - Up to $50,000 at 0% interest over 5 years.

Westpac offers the "Greater Choices" home loan, which allows borrowers to access up to $50,000 with no interest for up to five years.

The loan can be used for a range of sustainable enhancements to your home, and also available to be used for energy efficient transport like an EV, hybrid vehicle or electric vehicle charger.

Plan Repayments and Avoid Debt Traps

While a Green Home Loan may offer attractive terms initially, it's important to understand the long-term cost implications. As with all loans any application will be subject to the banks credit criteria.

By working with a Mortgage Adviser you can evaluate the total cost of financing, including the interest rates that will apply once the interest-free period or low rate ends. This will help you make an informed decision and avoid any surprises down the line.

By making it easier to borrow to invest in energy-efficient and sustainable enhancements for your home, you can reduce your carbon footprint, lower your energy bills, increase your property’s value and create a more comfortable and healthier living environment for you and your family.

To learn more about Green Home Loans call Stephen Massey – Loan Market 021 711 444 or check out my website loanmarket.co.nz/stephen-massey.