First-of-its-kind product will help borrowers beat energy costs, it says
Firstmac has made a play for the growing green loan market, offering a solar home loan that it says is the first of its kind in the third-party channel.
The non-bank lender says the ground-breaking loan will help homeowners beat soaring electricity bills by installing a solar energy system at effectively no cost.
The solar home loan features a 0.6% interest rate discount for five years to borrowers who install a qualifying solar power system large enough to make a real impact on the power they take from the grid. It is available to new and existing Firstmac customers.
Firstmac said on an average home loan of $450,000, the 0.6% discount equated to $13,500 in savings over five years, which was more than the upfront cost of a 10kw solar system – the largest commonly available.
The non-bank’s managing director, Kim Cannon (pictured above), said the new solar home loan was perfectly timed to help homeowners feeling the pinch from higher interest rates, inflation, and an unprecedented increase in power bills.
“We know people are looking for ways to cut their costs right now due to the rising cost of living and especially soaring power costs, so we’ve created this loan which gives brokers a good long-term solution they can offer to borrowers struggling with high electricity bills,” Cannon said.
“Our solar home loan will help people cut both their mortgage repayments and their energy costs, while also fighting climate change by moving them to zero-emissions, renewable solar power.”
The solar home loan offer is available to owner-occupiers and investors, on either principal and interest or interest-only repayments, with an LVR of up to 90%. Cannon said this meant borrowers with low equity can access it, unlike other low rates in the market.
“Borrowers will have the option of a basic home loan (with no offset sub-account) or an offset home loan, with rates starting as low as 5.09% for owner occupiers on P&I repayments.”
Cannon said electricity prices increased by as much as $502 annually on average in some states in the second quarter of 2022.
“Meanwhile, inflation is running at 7.3% over the year to November and, since May 2022, official interest rates have increased from just 0.10% to 3.10%,” he said.
Savings from installing a solar power system vary widely depending on the size of the system, power prices and the feed- in tariff available in the homeowner’s location, but a large solar power system can cut bills by 50%, said Cannon.
Firstmac has been busy in the green lending space lately. In December, it completed a $475 million auto bond issue which provides details on the amount of CO2 emissions from each car it is secured against, with its green home loan also offering a discount of up to 1.58% for builders of energy-efficient homes.
In November, Firstmac appointed its first female board member – Sophie Mitchell, who joined the board as an independent director and boasted more than 20 years’ experience in the financial services industry in senior roles.
