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Buying or upgrading your home sustainably is now more affordable with green home loans. These special loan options reward homeowners who invest in energy-efficient properties or eco-friendly upgrades—helping you save money on interest and reduce your environmental footprint. This guide explains how green home loans work, which upgrades qualify, and how to compare offers so you can make your home—and your mortgage—more sustainable.
Let’s dive in..
Quick Summary
- Green home loans require homes to meet specific energy efficiency criteria.
- Qualification often requires a 7+ star NatHERS rating or other eco-certifications
- Major lenders offering green loans include CommBank, Loans.com.au, Gateway Bank, and Bank Australia.
- Benefits include lower interest rates, higher LVRs, and potential energy bill savings.
- Drawbacks include limited lender options and strict qualification criteria.
- NatHERS ratings measure a home’s energy efficiency on a 0-10 scale.
- To achieve a high rating, homes should use passive design principles and energy-efficient features.
- Green loans can be for new builds, purchases of efficient homes, or renovations to improve efficiency.
What Is A Green Home Loan?
A green home loan is a type of loan that encourages homebuyers to buy, build or renovate their homes in an environmentally friendly way. This is usually done through an interest rate discount, but only if your home passes one or more eco-friendly certifications.
As an added bonus, some lenders offer up to a 95% loan-to-value ratio (LVR) on green home loans, which is great if you have a small deposit. In addition, banks may offer a higher loan amount compared to a regular home loan.
With the average Australian household emitting about 18 tonnes of greenhouse gasses every year, the government is also offering incentives and rebates for homeowners who want to become more efficient in their use of energy.
Read more: Home Loans Brisbane: The definitive guide
Benefits Of Green Home Loans
Green home loans offer several advantages for Australian homeowners:
- Lower interest rates: Most lenders offer discounted interest rates for green home loans, which can lead to significant savings over the life of your mortgage.
- Higher borrowing capacity: Some lenders may allow you to borrow more with a green home loan than a standard mortgage.
- Reduced energy costs: Energy-efficient homes typically have lower running costs, saving you money on utility bills.
- Increased property value: As sustainability becomes more important to buyers, energy-efficient homes may command higher resale values.
- Environmental impact: By choosing a green home, you’re contributing to reducing Australia’s carbon emissions and promoting sustainable living.
- You may be eligible for additional rebates and incentives from state and federal governments for energy-efficient home features.
Green Home Loan Vs Regular Loan
A green loan is only for homes that meet certain criteria that make them energy-efficient, while a regular home loan is for any home.
The CSIRO recently found that only 10% of new homes currently being built received a 7-star NatHERS rating or higher and would be considered energy efficient and, therefore, qualify for a Green Home Loan.
Some of the differences between a regular loan and a green home loan include:
- Green home loans require you to meet strict criteria for things like heating, cooling, building materials, etc.
- Green loans sometimes have higher LVR than regular loans.
- Green home loans tend to have lower interest rates than regular loans.
- Some green loans do not offer an offset or redraw facility. So, make sure to talk to your mortgage broker about the options available to you.
However, both green and regular loans come with fixed and variable rates.
Read more: Fixed interest rates
How To Qualify For A Green Home Loan
To qualify for a green home loan in Australia, you’ll generally need to meet one or more of the following criteria:
- The home must be owner-occupied (some lenders may offer options for investors)
- Have a 7-star (or higher) rating from the Nationwide House Energy Rating Scheme (NatHERS)
- Hold a Residential Efficiency Scorecard with a 7 or more star rating
- Possess Passive House Certification
- Achieve a Green Star, Design & As-Built score of 8 points or more on the credit ’15 Greenhouse Gas Emissions’
- Meet specific energy-efficient features as outlined by individual lenders (e.g., solar panels, double-glazed windows, etc.)
It’s important to note that criteria may vary between lenders, so it’s best to consult with a mortgage broker or check with individual banks for their specific requirements.
Read more: Upgrading your home
Best Green Home Loans In Australia
A number of lenders in Australia now offer green home loans, and the list is growing every day. The main difference is that some banks will offer a Green Home Loan to new customers on newly purchased homes or to build a new home.
Other banks will offer their green home loans as a small top-up, up to $20,000, which can be used to “greenify” your home by adding solar panels and battery packs.
Here’s a list of the current offers, how to qualify, and what they offer (current as of November 2025):
CommBank (CBA)
Note: Commonwealth Bank is no longer offering its Green Home Offer and Green Loan as of October 2025.
How to qualify:
- Requires a valid Nationwide House Energy Rating Scheme (NatHERS) certificate from an accredited assessor showing a 7.5-star rating or higher.
- Loan purpose can include new build or extensive green renovation (via their “Green Construction” loan).
What they offer:
- Variable interest rate from 5.68% p.a. for owner-occupier Green Construction loans.
- Comparison rate starts from 5.94% p.a.
- No monthly or ongoing fees.
- Offset sub-account available (once construction/upgrade is completed).
- Unlimited additional repayments after completion of construction.
For more info: Click here
Gateway Bank offers three types of green home loans:
Eligibility / How to qualify:
- Property must have a minimum energy-efficiency rating: either a 7-star or higher from the Nationwide House Energy Rating Scheme (NatHERS) or a minimum 7-star from the Residential Efficiency Scorecard.
- Applies to new builds or existing homes certified with these ratings.
- Owner-occupier principal & interest loan required (typically).
Key features / What they offer:
- Discount from standard premium package home loan rate
- Variable interest rate from 5.10% p.a. for owner-occupier
- Comparison rate starts from 5.40% p.a.
- Features include: unlimited extra repayments, redraw facility, offset account (100% offset capability) in many cases.
- No establishment (or “application”) fee
- Maximum LVR typically up to 80%
Other notes:
- The product is positioned as part of Gateway’s “Premium Package Home Loan” family, but with green incentives.
- While exact discount may vary by loan size, borrower profile and property location, the “at least 0.25%” is a guide
Eligibility / How to qualify:
- This product is targeted at homes that may not meet the full 7-star rating but have verified green upgrades or lower rating thresholds (for example, 4-star to 6.9-star Residential Efficiency Scorecard).
- Homes with environmental features (e.g., solar PV, insulation, double-glazing etc) may qualify under this variant.
Key features / What they offer:
- Discount from standard package rate of at least 0.15%
- Same features as Green Plus: unlimited extra repayments, redraw, offset account.
- Variable interest rate from 5.10% p.a. for owner-occupier
- Comparison rate starts from 5.40% p.a.
Other notes:
- This variant gives flexibility for homes that don’t quite hit the highest certification but still demonstrate meaningful energy-efficient features.
- Requires documentation from accredited assessor and may have time-limits on verifying upgrades.
Eligibility / How to qualify:
- Designed for investor-owned properties that meet the same high energy-efficiency threshold: e.g., 7-star NatHERS or 7-star Residential Efficiency Scorecard.
- Minimum discount is tied to property meeting those green criteria.
Key features / What they offer:
- According to Gateway’s disclosure, the discount is a minimum 0.25% p.a. discount off the lender’s “Investor Premium Package Home Loan” variable rate for eligible properties.
- Variable interest rate from 5.49% p.a. for owner-occupier
- Comparison rate starts from 5.78% p.a.
Other notes:
- This is a relatively newer product in the investor space; Gateway emphasises that investors seeking sustainable properties can access green incentives.
- Because investor lending often has higher risk/interest, the discount is structured differently and investor documentation may require proof of property rating/ upgrades.
How to qualify:
- The funds must be used for verifiable green initiatives such as—solar panels, solar batteries, solar inverters, solar heating/cooling systems, rainwater tanks, energy-efficient renovations.
- Applicants must be a homeowner (or renovating one) subject to credit assessment.
What they offer / key features:
- Loan amounts from $2,001 up to $75,000.
- Fixed interest rates starting from ~6.57% p.a.
- No monthly or annual ongoing fees.
- No early-repayment or early-termination fees in many cases (check terms).
- Flexible loan term options up to 10 years for green loans.
- Application may be completed online; faster approvals/decisions noted by the lender.
Important caveats:
- The exact “starting rate” depends heavily on borrower credit, loan size, term, security, and whether the funds are strictly used for the green upgrade purpose.
- Because this is a specialised personal/green upgrade loan (not a standard mortgage product), features like LVR or property security may differ.
- Always check with the lender or a mortgage broker.
How to qualify:
- Buy or build a new home with high energy efficiency (for example, the New Build pathway requires building or buying a “green” home).
- Make major green upgrades to an existing home (Renovate pathway) — note: applications for the Renovate option are currently paused for new applicants.
- The property must meet certain eligibility criteria (e.g., owner-occupier or investor, loan to value ratio ≤ 90%).
What they offer / key features:
- Reduced variable home loan rate for 5 years (or fixed rate for 3 years) for qualifying homes.
- Example rate (New Build, effective 24 Sept 2025) for LVR ≤90%: Variable 5.13% p.a., Comparison rate 5.47% p.a.
- The loan is backed by the Clean Energy Finance Corporation (CEFC) in partnership with Bank Australia, helping fund and support the discounted rate.
- Features include: 100 % offset account, “eco-pause” option for repayments while you make green upgrades, and full principal & interest repayment option.
- Minimum new borrowings of $10,000.
Note: This is a “personal loan” style product rather than necessarily a full mortgage. It is more of a green home improvement loan.
How to qualify:
- The loan must be used for a purchase that supports sustainability or the environment (e.g., solar panels, insulation, green upgrades).
- Minimum loan can be as low as $500.
- Property or home improvements must meet the lender’s criteria (secured or unsecured loan) with the purpose clearly for an environmentally-friendly upgrade.
What they offer / key features:
- Variable interest rate: 7.20% p.a.
- Comparison rate: 8.54% p.a.
- No monthly service fees.
- Availability of extra repayments / redraw (on secured version) — allows faster pay-down of the loan.
- Maximum term 5 years for this product.
How to qualify:
- Your new home must have a valid Nationwide House Energy Rating Scheme (NatHERS) certificate from an accredited assessor showing at least 7.5-star rating.
- The product is geared toward new builds (or major construction) of energy-efficient homes.
- Home-loan should be principal & interest (P&I) or allow up to 5 years interest-only.
What they offer / key features:
- Up to a 0.45% p.a. discount off the standard construction/home loan rate for qualifying green homes.
- No annual or account-keeping fees for this green home mortgage.
- Unlimited additional repayments allowed after completion.
- Unlimited redraw facility after completion.
Other notes:
- The green home discount is time-limited: it applies for a set period (e.g., first five years) before reverting to the lender’s standard rate.
Pros And Cons Of Getting A Green Home Loan
The pros
- Green home loans are usually discounted, which can save you lots of money in the long run,
- Going green means that your house has a lower carbon footprint. For example, more efficient houses can emit up to 62% fewer greenhouse gases.
- Having a green home is not only good for the environment. It is also good for your pocket. An energy-efficient home can save you a sweet 66% in electricity usage.
- Green homes are designed to take advantage of natural things like sun and wind to make your home comfortable in any weather. This means you will enjoy living in your home with a lot of sunshine and good ventilation.
- There is less exposure to toxic materials in a green home, which can be very helpful in reducing respiratory illnesses.
- If you intend to sell your house down the road, then going green can increase the value of your home as more and more people are becoming climate-conscious when buying homes. According to a 2018 Energy Consumer Sentiment Survey, 60% of respondents said energy efficiency would be a factor when buying a home.
The cons
- Limited lenders. Although the list of lenders offering green home loans in Australia is growing, the list is still very small. This means you will have a limited pool of lenders to choose from. Talk to your mortgage broker to determine which lender works best for your situation.
- Green home loans usually have very strict lending criteria, which can make them difficult to get.
Bonus: What Is The NatHERS Rating, And How Does It Work?
One of the criteria for getting a green home loan is to have a NatHERS rating of 7 or higher. So, it is important to know what NatHERS is and how it works.
The Nationwide House Energy Rating Scheme (NatHERS) was introduced in 1993 and measures the energy efficiency of your home. It takes into account the amount of energy needed for heating and cooling your home. This is then used to give your home a rating between 0 and 10.
Note: NatHERS does not include water heating systems, lights and household appliances because these are replaced often.
According to the NatHERS website, your home’s rating depends on how well these factors suit the local climate:
- the layout of the home and orientation
- roof, walls, windows and floor construction methods and materials
- shading to the sun’s path and how well your home takes advantage of local breezes
What do the NatHERS ratings mean?
- A 0-star rating means the building shell does practically nothing to reduce the discomfort of hot or cold weather.
- A 6-star rating is a minimum standard in most states and territories. It indicates good, but not outstanding, thermal performance.
- A 10-star rated home may not need artificial cooling or heating to keep you comfortable.
Read more: 16 hidden costs of buying a home in Brisbane
Bonus: How To Achieve An Energy Rating Of 7 Stars
In order to achieve a high NatHERS rating, you have to design for your climate. Most Australian homes are usually too hot in summer or too cold in winter, which means they require large amounts of energy to make them comfortable.
The best way to improve a high NatHERS rating is to use a passive design for your house. A passive design uses the sun and wind to cool and heat your house naturally. You can create a passive design when building from scratch, or you can make some renovations to your existing house. The Australian government offers free designs for energy-efficient homes.
Here are some practical ways to improve your NatHERS rating:
- Glazing by the orientation of each room. For example, if you live in a hotter climate, North-facing rooms should have less glazing to prevent heat gain in Summer. But if you live in a cooler climate, North-facing windows should have more glazing to get passive heat gain.
- Prevent air leakage by putting weatherstrips and seals on windows and sliding doors.
- Make your interior room layout more efficient by grouping non-conditioned rooms like laundry and bathrooms close to each other.
- Change your roof colour. If you are in warmer places like Brisbane, a lighter colour for your room will be better. But a darker roof performs better in colder areas like Melbourne.
Green Home Mortgage Frequently Asked Questions
Can an investment property qualify for a green home loan?
Most lenders only offer green home loans for owner-occupied properties, as the goal is to encourage sustainable living. However, a few select lenders may consider investment properties if the property meets the same NatHERS energy rating or sustainability certification requirements. Always confirm with your lender before applying.
Does solar alone qualify for a green home loan?
No. Solar panels alone typically don’t qualify unless the overall home meets the minimum energy-efficiency standards — such as a 7-star NatHERS rating or equivalent. Green home loans reward comprehensive energy efficiency, not just individual upgrades.
What happens if I refinance my green home loan?
If you refinance to another lender, your green home loan features or discounts may end. You’ll need to check whether the new lender offers a green refinance option or requires a fresh energy-efficiency certificate to maintain the benefits.
What if I miss the rating requirement later?
Once your loan has been approved and settled, most lenders won’t re-assess your home’s rating — meaning your discount usually stays in place. However, if you make major changes that reduce energy efficiency, the property could lose eligibility for future green loan programs.
What happens if I add solar after settlement?
Adding solar after settlement won’t automatically turn your existing loan into a green loan. You may need to refinance into a green product or provide an updated NatHERS certificate showing your home’s improved rating. Some lenders also offer top-up loans or green renovation add-ons for this purpose.
Does the rating certificate expire or need re-assessment?
A NatHERS certificate does not expire, but it reflects your home’s condition at the time of assessment. If you renovate, extend, or upgrade significantly, you may need a new certificate to demonstrate that your home still meets the energy-efficiency standards for future green incentives.
What if I drop below the rating after renovations – does the loan revert?
Generally, lenders don’t revoke your discount once the green home loan is established. However, future energy inefficiencies could affect your eligibility for rate discounts, cashback offers, or green refinance options if the property no longer meets sustainability standards.
Applying For A Green Home Loan
If you are ready to go green for your home loan, our team at Hunter Galloway is here to help you. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
Note: all interest rates quoted on this page are current as at November 2024 and subject to change without notification
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