What are these cheap Bank Green Loans?

In recent times some major Banks have been offering cheaper loans (mortgage top ups) for environmental, eco-friendly, energy efficient and sustainable projects and purposes.

It can include things like electric cars, double glazing, EV chargers, insulation, heat pumps, solar power and similar things. Though each bank can differ slightly on what they will cover so it always pays to check their terms and conditions. 

Generally, a bank will also require the quote and invoice before advancing the funds (that proves you are actually spending the money on the right purpose). 

 The loan to value ratio usually needs to be under 80%, and of course you need to have a mortgage on your property already with the relevant bank. And you may need to already have a minimum amount of lending with the bank. 

Here is a bit of a summary of what banks are offering the loans:

Westpac “Greater Choices” – 0% for maximum 5 year term, capped at $50,000 and you may need to have a minimum amount of lending with them to qualify. May not apply to Hybrid vehicles.  

ANZ “Good Energy” – 1% fixed for 3 years (overall term can be longer), $3,000 to $80,000 maximum loan. 

ASB “Better Homes” – 1% fixed for 3 years like ANZ. Up to $80,000 and minimum 20% equity applies. 

BNZ “Better Future” – 1% for 3 years and maximum $80,000 like ANZ and ASB

Note Kiwi Bank don’t have something yet like the above banks but may fund smaller ‘green’ related purchases on a cheaper rate (refer their website for details).

Always check the lending criteria as it can change and there may be subtle differences such as a bank happy to fund an EV vehicle but not a Hybrid. 

If you are looking at buying an EV vehicle, these loans can be a good option especially when you only want to pay off a car up to 5 years maximum (ie not 30 years). 

Whilst these loans can have low rates, the like of Westpac it is a maximum of 5 years so payments need to be affordable at that level. 

These loans have been a great initiative especially for things such as heat pumps and double glazing which are a great idea to make your home warm and comfortable. 

To get one of these loans it pays to do your homework first. So, obtain the necessary quotes and ensure you know exactly how much you need. Then a full application with the bank (which we can help with) providing all the necessary information is required (forms, payslips etc) as you do need to be financially assessed. 

Whilst some ‘green’ related items might not add immediate value to your home, the key is being warm and healthy and hopefully saving on power and fuel costs!