Owner-occupiers and investors with existing or approved eligible loans will be able to borrow up to $50,000 with a loan term of up to 10 years through Westpac's Sustainable Upgrades Home Loan.
The green home loan is backed by the Clean Energy Finance Corporation's (CEFC) $1 billion Household Energy Upgrades Fund (HEUF), the government's landmark program designed to help Australians access cheaper financing for home energy solutions.
Of the total budget, the government is committing $160 million to support Westpac's Sustainable Upgrades.
"These competitive-rate loans will give customers the freedom to choose how to upgrade their homes and to make them more energy efficient and save on their bills," said Chris Bowen, Minister for Climate Change and Energy.
Green home loan add-ons in Australia typically offer lower interest rates compared to standard mortgages, in a bid to incentivise borrowers for adopting environmentally efficient measures.
At 4.49% p.a., Westpac's Sustainable Upgrades Home Loan is a highly competitive option, though not as competitive as CommBank's 3.99% p.a. green loan, also through a partnership with the CEFC.
In May this year, the HEUF made its first commitment of $60 million through fintech lender Plenti.
Who is eligible for Westpac's green home loan
The Sustainable Upgrades Home Loan is available to customers installing new features or technology in their properties to enhance energy efficiency and climate resilience.
"We recognise more Australians want to play their part to reach a net zero future, and that starts at home," said Jason Yetton, Westpac's chief executive of consumer banking.
According to a Westpac survey, 89% or nine out of 10 Aussies planning to renovate within five years would consider making a sustainable upgrade to their home.
The most popular energy-efficient upgrade is solar panels, with nearly two in five (38%) respondents considering installing the said feature.
This is followed by solar batteries, solar-powered water heaters, insulation, and double-glazed windows.
"This announcement will help our customers to make more environmentally conscious choices and improve their homes at the same time," Mr Yetton added.
A step to Australia's net zero plan
CEFC CEO Ian Learmonth said that increasing the uptake of renewable energy, storage, and related infrastructures is "critical" to the country's net zero ambitions.
The Australian Government's Net Zero Plan aims to transition to net zero greenhouse gas emissions by 2050, starting with significant reductions by 2035.
"The installation of more rooftop solar, home batteries, and energy efficiency equipment will help manage household energy costs and unlock additional clean energy capacity," Mr Learmonth said.
"This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable, and cleaner grid."
Photo by Markus Spiske on Unsplash
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