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Brokers will be able to write a new major bank loan from next week that gives borrowers up to $50,000 for ‘green’ upgrades.
Major bank Westpac is set to launch a new mortgage product that provides borrowers with discounts for making sustainable upgrades to their home.
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Westpac’s Sustainable Upgrades home and investor loans will be available to owner-occupier and investor home loan customers with an existing or approved eligible Westpac loan of $150,000, who are looking to install new features or technology in their property to improve its energy efficiency or climate resilience.
Upgrades could include solar batteries, hot water heat pumps, induction cooktops, EV chargers, bushfire-resilient fencing, storm and flood-resilient electricals, double-glazed windows and energy-efficient air conditioning units.
Eligible customers will be able to apply to borrow between $4,000 and $50,000 with a loan term of up to 10 years. Lenders mortgage insurance must not be applicable at the time of applying.
Initial variable rates start from 4.49 per cent (4.87 per cent comparison rate).
A Westpac spokesperson confirmed to The Adviser that the loan will be available through the broker channel.
Chief customer officer Jason Yetton said this new line is designed to cater to customers who want to make their homes more energy-efficient.
“We recognise more Australians want to play their part to reach a net zero future, and that starts at home,” Yetton said.
“This announcement will help our customers to make more environmentally conscious choices and improve their homes at the same time.”
According to a survey of more than 1,000 Australians commissioned by Westpac and conducted by Lonergan Research, nine out of 10 Australians who aim to renovate in the next five years would consider a sustainable upgrade to their home.
The ASX-listed lender has become the first bank to be supported by the Household Energy Upgrades Fund (HEUF), a $1 billion fund managed by the government-owned ‘green’ bank, the Clean Energy Finance Corporation (CEFC).
The CEFC has committed $160 million towards the Westpac Sustainable Upgrades Home Loan product that is expected to support at least $320 million in discounted loans to eligible Westpac home loan customers.
It made its first investment through the HEUF with Plenti earlier this year.
In June, Plenti launched its HEUF discounted green loans, with up to 3.34 per cent per annum discounts on standard green loan rates and longer loan terms of up to 15 years, after receiving $60 million through the HEUF.
Ian Learmonth, CEO of the CEFC, said increasing the uptake of sustainable home upgrades is critical to the nation’s net-zero ambitions and clean energy transition.
“The installation of more rooftop solar, home batteries and energy efficiency equipment will help manage household energy costs and unlock additional clean energy capacity,” Learmonth said.
“This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable and cleaner grid.”
You can find out more about green finance in the September edition of The Adviser. Subscribe here.
[Related: Metro launches new green asset finance loan]
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