What Are Green Loans?
A green loan is financing specifically designed for purchasing products and services that benefit the environment and reduce your home's energy consumption. Unlike regular loans, green loans offer preferential rates and terms because they support environmentally beneficial upgrades that also improve your home's value and reduce ongoing costs.
Why are they called "green"? The name comes from their connection to nature and environmental benefits – just like trees, grass, and forests. Green loans earned this name organically as they became recognised as a specific type of lower-cost financing designed to help homeowners purchase products that are great for both their homes and the environment.
What can Green Loans be used for?
Eligible Home Upgrades
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Solar Panel System
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Solar batteries
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Heat pump hot water systems
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Reverse cycle air conditioning
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Induction cooktops
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Energy-efficient appliances
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Roof, floor or ceiling insulation
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Double-glazed windows
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Energy-efficient lighting systems
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Smart home energy management systems
Green Loan Types
Green Home Loans and Mortgages
Green loan rates
| Lender Name | Interest Rate | Rate Type | Requires Mortgage | Max Term (Y) | Max Amount | Best For |
|---|---|---|---|---|---|---|
| RACQ Bank Green Loan | 2.79% | Variable | Yes | 10 | $50,000 | Lowest rate for existing RACQ customers |
| Westpac Sustainable Upgrades Home Loan | 4.13% | Variable | Yes | 10 | $50,000 | Lowest rate for existing Westpac customers |
| ING Green Upgrade Loan | 3.74% | Fixed | Yes | 5 | $50,000 | Lowest rate for existing ING customers |
| CommBank - Home energy loan | 3.99% | Variable | Yes | 7 | $50,000 | Lowest rate for existing CBA customers |
| Suncorp Bank Green Upgrades Equity Home Loan | 5.33% | Variable | Yes | 10 | $25,000 | Best interest rate for existing Suncorp customers |
| Community First Bank Green Loan | 7.34% | Variable | No | 10 | $100,000 | Lowest rate for non-mortgage customers that want a longer loan term |
| Gateway Bank Eco Personal Loan | 6.44% | Variable | No | 5 | $30,000 | Lowest rate for customers without a mortgage |
| Great Southern Bank Unsecured Green Personal Loan | From 6.99% | Variable | No | 7 | $75,000 | Alternative green loan with a low rate - risk based |
| RACQ Bank Green Personal Loan | 6.99% | Variable | No | 10 | $60,000 | Alternative maximum 10Y green loan with a low rate |
| Plenti Green Loan | 7.09% | Variable | No | 10 | $50,000 | Fast approval and discount for VPP customers |
| MONEYME Green Loan | From 5.99% | Variable | No | 7 | $100,000 | Speedy alternative with a low rate. Rate is risk based |
Secured Green Personal Loans
If you have a mortgage, chances are your bank offers very low interest rates to finance your upgrades. Interest rates are lower than the mortgage rate, so super attractive.
Think of a secured green personal loan as almost like a separate mortgage sub-account – it's secured against your property just like your main home loan, but it's completely separate with its own repayment schedule and terms. This means you get the benefit of low interest rates (because the bank has the security of your property) without having to touch your existing mortgage arrangements.
Unsecured Green Personal Loans
If you don't have a mortgage or your bank doesn't have a green loan, there are unsecured personal loan options available. They are simple, with no security required against your property, and rates are competitive – only slightly higher than your mortgage rate.
Benefits and Savings Potential
But here's the really exciting part – the upgrades you're financing with these loans are smart investments that keep paying you back long after you've made the purchase. When you install solar panels, batteries, heat pump hot water systems, induction cooktops, or reverse cycle air conditioning, you're not just buying products – you're investing in ongoing energy bill reductions that can last for decades.
The benefits go way beyond just saving money on electricity though. These upgrades make your home more valuable – recent data shows energy-efficient homes sell for an average of $118,000 more than standard properties – safer to live in, and often much more comfortable year-round. Plus, if you're thinking about refinancing down the track, having an energy-efficient home can actually help you qualify for better mortgage rates too.
Financial Benefits
Lower Borowing Cost
- Interest rates 1-3% below standard personal loans
- Reduced or waived establishment fees
- Early repayment options without penalties
Energy Bill Reductions
Installing energy-efficient systems through
Green Homes Australia typically delivers:
- 60-90% reduction in electricity bills
- Elimination of gas bills (with full electrification)
- Protection against rising energy costs
- Immediate monthly savings that help pay for the loan
Property Value Increases
Recent data shows energy-efficient homes sell for an average of $118,000 more than standard properties, with improvements including:
- Higher market appeal and faster sales
- Better rental yields for investment properties
- Future-proofing against energy efficiency regulations
Eligibility and Application Essentials
Standard Requirements
To qualify for green loans, you typically need
to meet these basic criteria:
- Regular employment with income above $25,000
- No current bankruptcy or debt agreements
- Stable financial situation with capacity to service the loan
- Australian residency or citizenship
Green-Specific Requirements
- Product Compliance: All purchased items must be on the lender's approved green product list
- Installation Standards: Work must be completed by accredited installers meeting compliance requirements
- Documentation: A quote and an invoice