Green mortgages an untapped resource for banks
(6 November 2012 – New Zealand) A green-building expert in New Zealand has suggested the country’s banks have huge potential to make a difference through lending and other products to make it cheaper for buildings to be upgraded.
Clever products such as loans that make it cheaper for landlords to upgrade energy-leaking buildings are being rolled out in Australia by the banks' parent companies. They could easily jump to New Zealand, said Alex Cutler of the Green Building Council.
'The larger financial institutions in New Zealand are based in Australia, where they are further along the growth curve when it comes to sustainability in business,' she told Fairfax NZ.
'Banks are not resource-intensive companies that pollute a lot. [So] the key areas where they can have an impact is through the decision-making they undertake, for example their lending criteria [for] projects and businesses as well as the packages or products they sell to consumers.'
Cutler said banks should be offering green mortgages with preferential rates to people who build more sustainable homes, as well as integrating sustainability into all lending criteria.
Banking products that might encourage people to improve their homes and commercial buildings are few in New Zealand, despite banks' good scores for corporate sustainability.
All major banks - ANZ, BNZ, Westpac, ASB and Kiwibank - waive the fee on mortgage top-up applications for people insulating their homes using the Government's Warm Up New Zealand scheme.
On green or sustainable products, BNZ and ASB said they also let people choose paperless statements on internet banking.
The newest green-bank product on the market is a mortgage top-up and subsidy for mini solar, wind or hydro schemes from Kiwibank.
The minimum NZ$5000 (A$3989) loans must be repaid during a maximum of 10 years and are attached to the mortgage (paying mortgage interest rates).
The bank will chip in NZ$2000 towards the cost of the build - NZ$800 at the end of the first year and $400 at the end of years two, three and four.
BNZ's Australian parent, National Australia Bank (NAB), was the first private lender to underwrite a new breed of contract called an Environmental Upgrade Agreement.
The cheap loans to building owners tackle what energy-efficiency boffins call split incentives.
'The larger financial institutions in New Zealand are based in Australia, where they are further along the growth curve when it comes to sustainability in business,' she told Fairfax NZ.
'Banks are not resource-intensive companies that pollute a lot. [So] the key areas where they can have an impact is through the decision-making they undertake, for example their lending criteria [for] projects and businesses as well as the packages or products they sell to consumers.'
Cutler said banks should be offering green mortgages with preferential rates to people who build more sustainable homes, as well as integrating sustainability into all lending criteria.
Banking products that might encourage people to improve their homes and commercial buildings are few in New Zealand, despite banks' good scores for corporate sustainability.
All major banks - ANZ, BNZ, Westpac, ASB and Kiwibank - waive the fee on mortgage top-up applications for people insulating their homes using the Government's Warm Up New Zealand scheme.
On green or sustainable products, BNZ and ASB said they also let people choose paperless statements on internet banking.
The newest green-bank product on the market is a mortgage top-up and subsidy for mini solar, wind or hydro schemes from Kiwibank.
The minimum NZ$5000 (A$3989) loans must be repaid during a maximum of 10 years and are attached to the mortgage (paying mortgage interest rates).
The bank will chip in NZ$2000 towards the cost of the build - NZ$800 at the end of the first year and $400 at the end of years two, three and four.
BNZ's Australian parent, National Australia Bank (NAB), was the first private lender to underwrite a new breed of contract called an Environmental Upgrade Agreement.
The cheap loans to building owners tackle what energy-efficiency boffins call split incentives.
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