This article is from the Australian Property Journal archive
HOMEOWNERS will see $230 million in discounted green home loan financing, as CEFC backs Firstmac’s $750 million green mortgages.
Qualifying homes will need to meet or exceed a 7 star rating from the Nationwide House Energy Rating Scheme (NatHERS), making the homes some of the most efficient in the country.
The $750 million green mortgage-backed securitisation was raised by Firstmac, with CEFC providing $108.5 million in backing, on behalf of the Australian Government.
While Japanese bank, Norinchukin, invested support of $637.5 million into the securitisation, reflecting investors growing confidence in backing sustainable financing.
“Green home loans are an effective way to use our finance to benefit Australians over the long term. With this new investment we have now committed more than $580 million to cleaner greener homes Australia wide, including more than $220 million to green home loans,” said Ian Learmonth, CEO of CEFC.
Borrowers will be granted a 0.4% discount for up to five years, on loans up to $1.5 million, with construction loans benefitting from an interest rate discount of up to 1.58%, with an expected average loan size of $450,000.
“With the average home having a life span of 50 years or more, these investments have the potential to lock in lower energy consumption over the long term, as well deliver more comfortable homes that are cheaper to run,” added Learmonth.
Firstmac, which is the country’s first non-bank financial institution, initial seed pool will include $520 million in existing home loans with the institution, which comply with the Global Climate Bonds Initiative’s residential Low Carbon Buildings Criteria.
“We are pleased to support efforts for a sustainable future and deepen our existing relationship with similarly-minded organisations like Norinchukin and the CEFC, in issuing the first Australian 100 per cent Green RMBS Transaction,” said Kim Cannon, managing director of Firstmac.
Customer demand for sustainable financial products fuelled Firstmac’s decision in offering the discounted loans, with the lenders also introducing a green car financing option.
“Together with Norinchukin and Firstmac, we are pleased to have developed this Australian first securitisation. This is an exciting model for a new investment product for institutional investors wanting to put their money to work in cutting carbon emissions,” concluded Learmonth.
