Case study
Firstmac creates first
green home loan
Australian first securitisation for green homes
Australia’s largest non-bank financial institution Firstmac will help deliver more energy efficient housing through a green home loan that offers discounted interest rates for eligible homes.
Norinchukin will financially support Firstmac's future focus on environmentally friendly housing financing efforts, and by continuously following the progress, we will contribute to the promotion of environmentally friendly housing and global climate change countermeasures by reducing greenhouse gas emissions and energy consumption. We believe that this transaction will contribute to securing stable profits through international diversified investment and will be in line with the bank's philosophy of sustainable management.
Hidetoshi Hasegawa
Global Head of Credit and Alternative Investments, Norinchukin
Our investment
In an Australian first, Firstmac raised $750 million through a green mortgage-backed securitisation where all the underlying mortgages are backed by environmentally friendly housing. The CEFC invested $108.5 million in the securitisation.
our impact
Firstmac will use some $230 million of the finance raised to offer its first Green Home Loan product, tied to the Nationwide House Energy Rating Scheme (NatHERS). It will also refinance a pool of existing Firstmac home loans valued at some $520 million, where these comply with the residential Low Carbon Buildings Criteria created by the global Climate Bonds Initiative.
In a demonstration of growing investor confidence in tailored finance for green homes, leading Japanese bank Norinchukin has backed the securitisation with $637.5 million.
The investment is the second for the CEFC in the growing green home loan market following the successful launch of the Bank Australia Clean Energy Home Loan in 2020. Bank Australia has already drawn on $90 million in CEFC finance.
Qualifying green home loans will enable borrowers to benefit from a 0.4 per cent finance discount for up to five years on loans of up to $1.5 million. Construction loans will receive an interest rate discount of up to 1.58 per cent.
The homes will be among the most energy efficient in Australia, meeting or exceeding a 7 Star NatHERS rating. Firstmac will offer the loans Australia wide, with an expected average loan size of $450,000.
With the average home having a life span of 50 years or more, the green home loans have the potential to lock in lower energy consumption over the long term, as well as deliver more comfortable homes that are cheaper to run.
Please note: The CEFC does not provide finance to individual borrowers and is not involved in individual financing decisions. Interested borrowers should contact Firstmac directly.
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