1% for three years for energy-saving projects

The home loan market may be very subdued, but that is not stopping banks from coming up with ‘new’ ways to lend.

The latest is from ANZ which has launched a “Good Energy Home Loan top up.”

For those with an existing ANZ mortgage, it will allow them to borrow up to $80,000 at a three-year fixed rate of 1% per annum.

It can be used to upgrade homes with things like solar panels, heating and insulation, double glazing, ventilation systems and rain water tanks. It can also be used for electric and hybrid vehicles, and EV chargers.

It’s aimed at households who are concerned about rising energy and fuel costs, as well as environmental sustainability, and were looking to make changes where they can. It could remove some of the cost barrier for people wanting to make such changes.

For those who take up the full $80,000 on offer, it will cost $800 per year ($15.40/week) for three years in interest. Energy cost savings of at least this level should be possible for most good energy-saving projects.

The latest EY Mobility Consumer Index shows that the desire to live more sustainably also extends to people’s choice of car, with half of New Zealanders looking to buy a hybrid or EV in the future.

The 1% offer is a teaser, but fixed for three years, it is a valuable benefit.

A normal three year $80,000 loan would cost $118/week when amortised over a 30 year term (principal and interest). This “Good Energy Home Loan top up” will cost only $59/week, including the interest component.

ANZ says the offer isn’t really a “top-up” of an existing loan, it will be set up as a separate loan so it would roll on as a separate loan unless the borrower decides to restructure. After the special three year fixed rate, ANZ’s Home Loan floating interest rate will apply.

The current ANZ floating rate is 5.94%. If that rate was around in three years, the repayment would rise to $110/week.

There’s more detail on the loan from ANZ here.