CEFC and ING sign MOU to deliver low-rate green home loans via HEUF

13 November 2024

The CEFC will work with ING Australia to deliver a low-rate green home loans sub-account for clean energy technologies in what will be the third investment from the Household Energy Upgrades Fund™ (HEUF™)¹.

Under a Memorandum of Understanding (MOU) signed by both parties, the CEFC will consider investing up to $75 million to help finance the $150 million ING Green Upgrade Loan program.

The CEFC finance² is expected to help deliver a fixed rate of 3.74 per cent, representing a discount of 2 per cent on an ING Fixed Rate Home Loan for the first five years of the loan. On an ING Green Upgrade Loan balance of $50,000 a customer could save up to $5000 over the first five years *.

We’ve designed our Green Upgrade Loan following customer and mortgage broker feedback that the retrofitting process is complex and time consuming. If we want to accelerate decarbonisation, we need to remove the complexities and barriers that are stopping people from making their homes more energy efficient.

Melanie Evans

ING CEO

Under the ING Green Upgrade Loan, eligible ING mortgage customers can apply to borrow up to $50,000 to install a range of clean energy technologies to improve energy efficiency, reduce energy use and cut emissions³.

The discount rate will be available⁴ to ING mortgage customers, with eligible technologies including battery ready solar PV, battery and inverters.

Borrowers will be able to utilise the Home Energy Helper, delivered in collaboration with BOOM! Power, which can recommend appropriate clean energy technology upgrades designed to reduce energy costs and emissions based on a household’s existing systems and appliances.

CEFC CEO Ian Learmonth said: “Helping households lower their carbon footprint is a critical factor in achieving net zero emissions by 2050. Our work crowding in additional private capital through the HEUF will help deliver a catalytic outcome, providing low-cost financing together with a range of co-financiers for home upgrades that improve energy performance.”

Australia’s existing 11 million homes are responsible for more than 10 per cent of total emissions and more than 25 per cent of electricity consumption⁵.

ING CEO, Melanie Evans said: “Household emissions are one of the biggest contributors to Australia’s carbon footprint which is why we are doing all we to can to help customers upgrade their homes to reduce their household emissions. We’ve designed our Green Upgrade Loan following customer and mortgage broker feedback that the retrofitting process is complex and time consuming. If we want to accelerate decarbonisation, we need to remove the complexities and barriers that are stopping people from making their homes more energy efficient. We have created an experience that is stress free and customer focused.”

The Australian Government has allocated $1 billion to the CEFC to create the HEUF and fast-track sustainability improvements in existing housing by providing discounted consumer finance through a broad range of co-financiers.

The CEFC has engaged extensively with the sector and received proposals from a wide range of financiers, including major banks, mutual banks, non-banks and fintech innovators. The proposals covered green mortgages, green personal loans and other innovative green finance products to improve home energy performance for homeowners, renters and strata properties.

The CEFC has received proposals for investment opportunities worth more than $850 million in green loans. It has since announced investments via the HEUF worth some $220 million. It continues to work with a range of lenders to develop products with the potential to be financed through the HEUF, with further commitments expected in 2025.

The HEUF builds on the CEFC experience in designing and leading the green home and personal loan markets, and the uptake of clean energy technologies, through its consumer finance programs, as well as investments to help improve energy efficiency across the property sector.

Please note: The CEFC does not provide finance to individual borrowers and is not involved in individual financing decisions. The CEFC does not assess individual finance applications and does not provide grants. Interested borrowers should contact ING directly.

*Calculations based on a loan size of $50,000 and a loan term of 30 years with a fixed interest rate for five years at 3.74%, variable interest for 25 years at 6.14%, Monthly Principal and Interest repayments and an LVR 80% and under. The savings represented are associated with the 2 per cent discount for the ING Green Renovation Loan from the 5 year fixed headline rate of 5.74 per cent.

1 Subject to agreement and execution of binding documentation.

2 As above.

3 The launch of the ING Green Upgrade Loan, its availability and terms and conditions remain subject to the discretion of ING.

4 As above.

5 Climateworks Centre, Renovation Pathways: Defining zero carbon homes for a climate resilient future, 2023.