Green lending –an untapped opportunity

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In a market of increasing interest rates, higher energy prices and heightened consumer demand for sustainable products, green lending remains an opportunity for consumers and brokers alike

IN AN environment of rising interest rates, rising energy costs and all-round cost-of-living pressures, green home loans remain an untapped opportunity for borrowers and brokers alike. Green home loans typically offer borrowers a discounted rate or potential LVR concessions on energy-efficient homes that meet recognised energy efficiency standards from Green Building Council Australia (GBCA) or the Nationwide House Energy Rating Scheme (NatHERS). Despite both the need for energy-efficient homes and the consumer benefit of significant savings on green home loans, the product category remains a niche, with only a small number of lenders offering a green or energy-efficient home loan. Typically, the green home loan market is served by a small number of mutual banks and non-bank lenders such as Gateway Bank, Bank Australia and Brighte.

Gateway Bank is one of Australia’s leading customer-owned banks, operating for over 70 years. It is a long-term supporter of the broker channel and launched its multi-award winning Green lending portfolio in 2021. Gateway is committed to doing the right thing for its members and the planet and drives its commitment through a wide range of products, services and initiatives that underpin its ‘Pocket & Planet’ purpose. Gateway’s aim is to help more Australians save money while helping them achieve more sustainable day-to-day living.

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“The mismatch between consumer benefit and consumer awareness provides brokers with a great opportunity to deliver value for a growing segment in the market”

Zeb Drummond, Gateway Bank

Published 26 Oct 2026

“As more options become available in this space, it’s the brokers that understand the qualification criteria, certifications and the financial benefits that will be best placed to help their clients access the most suitable products”

Consumer awareness of green home loans and their benefits remain low. Gateway Bank research has shown consumer awareness has remained relatively low over a number of years, with only one in four borrowers saying they have heard of such loans. Interestingly, when consumers were aware of green home loans, their views on how best to obtain one differed considerably from their views on standard home loans. Only 22% of consumers told Gateway they would expect to approach a broker for a green home loan compared to the broker’s market share of over 80%. “The mismatch between consumer benefit and consumer awareness provides brokers with a great opportunity to deliver value for a growing segment in the market,” says Zeb Drummond, chief operating officer at Gateway Bank. Increasing green lending options and more pathways to qualification When green home loans first entered the Australian market, the lending criteria were narrow and only covered houses with an acceptable NatHERS rating. However, with new rating tools, such as GBCA’s Green Star Home and Green Star Apartments, and more lenders entering the market, borrowers have access to more options, which will continue to increase as the market continues to evolve and grow. “As more options become available for borrowers in this space, it’s the brokers that understand the qualification criteria, certifications and the financial benefits that will be best placed to help their clients access the most suitable products,” adds Drummond. For borrowers and brokers alike, it’s important to understand the certification criteria. For homes to achieve either the required NatHERs or GBCA certification levels, a whole-of-home approach to energy efficiency is needed. It’s more than just a case of throwing solar panels on the roof. Home electrification including heat pumps, insulation levels, glazing, draft and heat loss all need to be considered and measured.

discounted interest rates for energy-efficient homes potential LVR concessions on eligible properties recognition under NatHERS and GBCA Green Star certifications options for both new builds and existing home upgrades personal loan products available to fund energy-efficiency improvements

Alongside the range of green home loans in the market, there is a significantly wider range of personal loans for energy-efficient home upgrades of approximately $30,000–$50,000 available in the market for borrowers to improve the energy efficiency of their homes and enable them to meet the certification criteria for a green home loan. Many of the lenders of these upgrade loans are working with the Clean Energy Finance Corporation’s Household Energy Upgrade Fund to help more households transition to cheaper and cleaner energy and lowering their carbon footprint. Green home loans offer borrowers more than just a rate discount. Their features include:

Consumer benefit beyond a lower interest rate As energy costs look more likely to stay higher for longer, the benefits for consumers in buying energy-efficient homes or making sustainable energy-efficient upgrades to their homes goes well beyond the savings that can be made through a green home loan. Reducing energy use and moving to more sustainable energy sources at home can help consumers access significant savings on their energy bills while also improving the comfort and energy efficiency of their homes. For consumers, knowing where to start and where to invest in these energy upgrades can feel daunting and complex. However, many lenders now offer a range of tools that can help illustrate the costs and benefits of energy upgrades, helping borrowers make informed decisions. Gateway, for example, has a Home Energy Upgrade tool that can help homeowners understand the costs and savings that can be made from a wide range of sustainable upgrades, such as solar, home battery, insulation or electric hot water pumps, on their homes.

Over the last few years, Gateway Bank has continued to see solid growth in its green home loan book. Particularly in recent months, in increasingly challenging market conditions, its levels of green lending enquiry and funding have not only stayed steady but increased as consumers realise the benefits of an energy-efficient home, coupled with aligned cheaper green finance. The green home loan opportunity remains an untapped opportunity for consumers and brokers alike. For consumers transitioning to a cleaner, more affordable and more sustainable household energy usage, green home loans provide a more comfortable and sustainable home that is cheaper to run in the long term, with the added benefit of reduced home-loan interest rates compared to similar home loans. For brokers, green home loans provide another opportunity to demonstrate their expertise and value to their clients, as well as reach a new market segment and, in turn, support incremental growth in their business.

reduced energy bills through home electrification and insulation upgrades lower carbon footprint from shifting to sustainable energy sources improved home comfort and liveability year-round increased property value through certified energy-efficiency ratings access to cheaper green finance alongside energy savings

Zeb Drummond, Gateway Bank

“There are more and more tools to support borrowers and brokers through the green lending journey, which help quantify the savings that can be made over the long term,” comments Drummond. Investing in energy-efficient upgrades can deliver a range of long-term benefits for homeowners, including: