Australia's second-largest home lender will offer its home loan customers a variable rate of 4.49% p.a. to fund energy-efficient upgrades to their properties.
Owner occupiers and investors with an existing or approved eligible loan will be able to borrow an additional $50,000 with a loan term of up to 10 years.
Westpac is the first of the big banks to access the federal government's $1 billion Household Energy Upgrades fund, which is committing $160 million through the Clean Energy Finance Corporation (CEFC).
The government scheme is intended to improve energy efficiency in Australian homes and covers installation of solar panels, batteries, hot water heat pumps, electric vehicle chargers, double-glazed windows and insulation.
The loans will be available from next Monday 26 August.
Net zero "starts at home"
Westpac said the move will help its customers make more environmentally conscious choices and improve their homes at the same time.
The bank's research found nine out of 10 Australians looking to renovate within five years would consider making a sustainable upgrade to their home.
Westpac's big bank peer Commonwealth Bank of Australia already offers a 3.99% p.a. green loan through a partnership with the CEFC.
CommBank's add-on loan for its eligible customers is for amounts up to $30,000, comes with no establishment or monthly loan service fees, and can be repaid over 10 years.
However, it doesn't allow access to an offset account, redraw, or other features such top-ups, switching, or loan splitting.
Some smaller lenders also offer green loan products with CEFC support.
These include Bank Australia and Firstmac who were among the early recipients of the more than $350 million allocated in the first three years of the fund.
It's estimated Australian households are directly responsible for about 20% of Australia's greenhouse gas emissions.
Mortgage stress on the rise: Westpac
In other news on Monday, Westpac's quarterly result shows a steady rise in the bank's mortgage delinquencies.
Westpac's 30+ day delinquencies are at 1.9% of loans while 90+ day delinquencies are at 1.12%.
This is slightly higher than CommBank's revealed in full year results last week.
Westpac said the cost of living and high interest rates remain a challenge for some its customers.
Despite that, the bank reported housing loan growth of 8% for the 12 months to June.
Overall, Westpac's unaudited net profit rose 6% based on the bank's average quarterly performance so far in 2024.
Image by Ricardo Gomez Angel on Unsplash
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