HEUF delivers green home loans for renovations with Bank Australia
6 December 2024
The CEFC has announced a $50 million commitment to Bank Australia for energy performance upgrades of existing homes as the roll out of the landmark Household Energy Upgrades Fund (HEUF) program continues to gather pace.
The CEFC finance will support up to $100 million in green lending, including the flagship Clean Energy Home Loan to help deliver a reduced variable rate of 5.38 per cent for the first five years of the loan. For example, on a loan balance of $500,000 on a comparable home loan, this can reduce monthly repayments by $254 for five years with potential savings of $24,500 in interest payments over a 30-year loan term*.
It is the latest CEFC investment from the HEUF, taking total commitments through the program to $270 million.
CEFC CEO Ian Learmonth said: “We are proud of the work we have done with Bank Australia to develop the green home loan market and create innovative loan products to cater for consumer demand. This commitment via the HEUF is a great opportunity to reach more Bank Australia customers and support the electrification journeys of their existing homes.
We know purchasing a sustainable home or making green upgrades isn’t always an easy process, and that’s why we’re working with the CEFC to offer attractive loan products and support our customers to decarbonise their homes.Damien WalshBank Australia Managing Director
“Increasing the uptake of renewable energy, storage and related infrastructure is critical to Australia’s net zero ambitions and clean energy transition. The installation of more rooftop solar, home batteries and energy efficiency equipment will help unlock additional clean energy capacity. This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable and cleaner grid.”
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 consumption1.
The Bank Australia Clean Energy Home Loans were created to help incentivise customers to buy or create more sustainable homes.
Bank Australia Managing Director, Damien Walsh said: “As a customer-owned bank we know our customers care about climate action so we’ve set a net zero emissions by 2035 target. Supporting our customers to buy, build or renovate energy efficient homes will play a big role to meet our goal.”
“We know purchasing a sustainable home or making green upgrades isn’t always an easy process, and that’s why we’re working with the CEFC to offer attractive loan products and support our customers to decarbonise their homes.
“We have changed our Clean Energy Home Loan criteria to be all-electric and made it easier for customers to select the relevant pathway for their home, whether that’s renovating an established home or buying a newly built home.”
Bank Australia is also rolling out free access to the BOOM! Power Electrify Your Home tool for customers. The home energy assessment generated by the tool recommends electrification upgrades and connects customers with suppliers.
The Australian Government has allocated $1 billion to the CEFC to create the HEUF and fast-track energy 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 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.
The CEFC and Bank Australia are market leaders in green home loans, working together since 2020 to finance green upgrades and green homes worth more than $250 million via Bank Australia Clean Energy Home Loan products. These products have helped deliver significant improvements in home energy efficiency. Bank Australia customers achieved an average NatHERS rating of 7.9 stars for new builds, compared to the national average of 6.4 stars.
*Based on published variable interest rates effective 30 October 2024, potential interest savings is calculated as a comparison of Clean Energy Home Loan Renovate and Bank Australia Offset Home Loan with a <80% loan-to-value ratio on a $500,000 owner occupied loan with a 30-year term.
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 Bank Australia directly.
Bank Australia exists to inspire and empower our customers to use their money to create a world where people and the planet thrive. We are 100% customer owned, a certified B Corp and we aim to be Australia’s most trusted bank. Our commitment to clean money means we focus our lending and investments in areas that do good, not harm, for people and the planet. We support more than 190,000 customers and we’re the custodians of more than $11.7 billion in assets.
1 Climateworks Centre, Renovation Pathways: Defining zero carbon homes for a climate resilient future, 2023.
