All the cool kids are doing it!
Since 2021, all 5 of the main New Zealand banks have brought out home loan products specifically for energy efficiency and helping make New Zealand homes warmer, dryer, and heathier. Some banks have also extended these to be for energy efficiency in other ways too including solar panels, home batteries, and even electric vehicles.
Let's go through them at a high level and see what might be right for what you are wanting to do:
ANZ - Good Energy Home Loans
ANZ offers a Good Energy Home Loan that allows you to top up your existing ANZ Home Loan at a fixed rate (currently 1%) for 3 years, up to $80,000, to make your home more energy efficient and better for the environment.
The things that can be included here are:
Heat pumps
Insulation
Glazing -Double, secondary, or triple glazing.
Ventilation
Water heating systems
Hybrid and electric vehicles
Electric vehicle chargers
Electric bikes
Solar panels
Solar batteries
Rainwater tanks
Kiwibank Sustainable Energy Loan:
Kiwibank offers a sustainable energy loan that provides up to $2,000 over four years towards the cost of a sustainable energy system if you borrow more than $5,000
This may include:
Solar power
Small-scale hydro
Wind energy
Geothermal resources
These loans are done at the floating interest rate and are spread over 7 - 10 years
Westpac Warm Up Loan:
Westpac offers a Warm Up Loan that provides an interest-free loan of up to $40,000 for five years for:
Insulation
Heat pumps
Double glazing
Ventilation
Wood burners
Solar power systems
Batteries
Electric vehicle chargers
ASB Better Homes Top Up
ASB Better Homes Top Up provides a range of home loan top-ups for energy-efficient improvements. This is up to a maximum of $80,000 fixed for 3 years at 1% interest currently.
This can be used for:
Electric or hybrid vehicles
Electric vehicle charging units
Underfloor, ceiling or wall insulation
Window glazing
Heat pump system
Wood burner or wood pellet burner
Extractor Fans
Ground moisture barriers
Ventilation systems
Heat pump water heaters
Solar hot water systems
Wetbacks
Solar panels, batteries and inverters
Solar hot water systems
BNZ Green Home Loan top-ups
As part of BNZ Green Home Loan top-ups, you can borrow up to $80,000 at a 1% 3-year fixed rate to pay for eligible upgrades to your home or for electric transport options. These include:
Solar panels, batteries, and inverters
Heating and insulation
Heat pumps
Water heating
Insulation
Window glazing
Ventilation
Water tanks
Rainwater tanks
EVs or plug-in hybrids
Electric chargers
Electric bikes
What's the catch?
Some of these things seem too good to be true and with anything like this there are criteria that you need to meet so let's quickly chat through them.
You still need to be able to service the new lending - Just because the lending is low-interest or interest-free, doesn't mean the banks can bypass the normal application process or servicing requirements. You will be assessed as if you normally will need to be for a top up
Most of these things need to be installed by a professional and we need quotes for them - Although some people would like to and would be capable to install these types of things themselves, they need to be done by professionals and occasionally by people with specific accreditations to meet the bank's criteria so please check with us first about what we can do
The bank must hold your home as security - We can't use these loans independently of your current lending. You must still meet their normal loan-to-value ratio restrictions and have equity to use. Also if your home loan is with one bank but you want to use a different bank's Energy Top Up program, we would need to look at refinancing your existing lending to the new bank as well. This may have bank fees and will have some legal costs associated also.
It is awesome the banks are supporting "green" initiatives that will make our homes better for the people who live in them. There are a few factors to consider so get in touch with the My Mortgage team and we can point you in the right direction early on in your planning and then be in the best position to take advantage of these great products.