Borrowers Hungrier for Green Home Loans
The current climate – both environmental and financial – is driving a growing awareness of Green Home Loans, with new building regulations set to make more homes qualify for the product later this year, according to Gateway Bank.
In the second annual research survey conducted for Gateway Bank by The Research Department, awareness of Green Home Loans has grown, with 41% of respondents declaring some level of knowledge of the products in the marketplace, up from 35% the previous year.
The cost-of-living squeeze has contributed to the appetite for home features that help save homeowners money, while also making their homes more energy efficient and sustainable. Nearly 8 in 10 respondents (an increase of 2% on the previous year) said that rising energy costs would be a key driver for them to install at least one feature such as solar panels, to qualify for a green home loan. Over half (55%) identified battery storage (+2%) as a feature they would willingly install.
“The good news is that when the latest changes to the National Construction Code come into effect in May 2023, virtually all new-build homes will be built to a 7 star NatHERS rating, which automatically qualifies them for a Green Home Loan,” said Lexi Airey, CEO of Gateway Bank.
“This means homes built from May onwards will have thermal efficiency features that help decrease its heating and cooling needs, resulting in big savings on energy bills and a more comfortable place to live.”
Gateway Bank offers a 0.25% discount on its Premium Package Home Loan if the home has energy efficiency measures that meet a 7 Star NatHERS Energy Efficiency rating or a 7 star Residential Efficiency Scorecard rating.
“Gateway’s Green Home Loan financially rewards the borrower with a discount on their mortgage for doing the right thing environmentally. At a time of interest rate and inflation pressures, this can make a real difference not only to home loan repayments, but also to energy bills over time,” said Ms Airey.
Interestingly, consumers looking for a Green Home Loan appear to be bucking the national trend of using a mortgage broker as the primary method of sourcing one. Only 1 in 5 respondents stated they would approach a broker for this type of loan, and just under 30% (28.4%) indicated they would shop around themselves to find a provider to approach directly.
“This seems like a tremendous opportunity for mortgage brokers to include Green Home Loans in their offer and capture this growing market,” said Ms Airey.
Gateway Bank’s website features a comprehensive Guide to Building an Eco-Home with tips and information on changes that can be made to homes to help reduce power usage, increase energy efficiency and eliminate water wastage.
Gateway Bank has also recently received a 2023 Mozo Experts Choice Green Home Loan Award, in recognition of its Green Plus Home & Green Home Loan (Premium Package) products being among the top 10% of lowest cost options available, taking into account interest rates, and mandatory fees. This is the second year running that Gateway has held the coveted Green Home Loan winner title.
In both the 2021 and 2022 surveys for Gateway Bank, 1000 quantitative interviews were conducted nationally, and 20 qualitative interviews took place across Sydney and Melbourne.