Less than a month after ANZ started offering its “Good Energy Home loan” at 1% interest, Westpac has announced an extension of its “Westpac Warm Up Loan”. The loan will allow customers to borrow up to $40,000 without any interest.
Originally, the Warm Up Loan allowed customers to borrow up to $10,000 interest-free. However, that was quite limited, considering a solar power system costs close to $10,000 alone. In addition to increasing the borrowing amount, Westpac has also added two important qualifying purchases to the list - electric vehicle chargers and solar batteries.
Let’s learn about the loan in some more detail.
Westpac Making a Difference
According to Westpac, the Warm Up Loan is meant to help customers make their homes warmer, drier, more sustainable, and energy efficient. Before the expansion, Westpac has already lent more than $30 million through the loan, and aims to reach the $100-million mark.
That’s not all, the bank is also piloting the new “Sustainable Agribusiness Loans” with a small group of farming customers. Based on the outcomes, the loans will be rolled out more widely next year.
The Warm Up loan’s expansion and agribusiness loans initiative are a part of Westpac’s larger vision - that of promoting sustainability. In fact, the Westpac Group, including Westpac NZ, has signed up to United Nation’s Net-Zero Banking Alliance. This puts it on the list of banks pledging to align their lending and investment portfolios with net-zero emissions by 2050.
On that front, Westpac has already started making policies - it is not lending to coal mining companies and logging companies, or to payday lenders and mobile truck shops. These borrowers are now on the bank’s list of “sensitive” sectors.
Besides that, Westpac keeps several other companies at bay, including commercial whaling, shark-finning, and nuclear weapons-related companies (except as part of government-controlled programmes with NATO countries authorised under the Nuclear Non-Proliferation Treaty).
Westpac Warm-Up Loan Details
The Warm Up Loan is available to customers starting August 4. The tenure of the loan will be a maximum of five years. Customers can choose a mix of insulation, heat pumps, double glazing, ventilation, wood burners, solar power systems and batteries, and electric vehicle chargers.
The loan is available to new or current Westpac Choices Home Loan customers and carries no establishment fee. An important requirement of the loan is that the installation must be completed by a professional installer. For this, you will need to submit a quote from a registered installer, and it must not be older than 90 days.
Customers unable to meet their repayments in the specified duration will have to pay a default interest rate of 5% on their outstanding loan balance.
Get 3 Free Quotes For Solar And Batteries Now.
Other Low-Interest Options For Financing Solar
Westpac is not the only bank in New Zealand promoting sustainable upgrades through a soft loan. ANZ, one of the country’s largest banks, is already offering loans for solar and batteries at just 1% interest. The loan is called “Good Energy Home Loan”, and offers up to $80,000 for borrowing.
Kiwibank is another institution that makes borrowing for energy-efficient tech easier. When you borrow $5,000 from Kiwibank, it will put in $2,000 over four years - $800 at the end of the first year and $400 at the end of each of the following three years.
Final Thoughts
Westpac’s Warm Up Loan is a welcome offer for many homeowners who are willing to choose sustainable technologies but are deterred by the upfront costs.
As Westpac CEO Catherine McGrath puts it, “It's really sensible lending about home improvements, it reduces the cost of builds, it's helping to make homes warmer, and in the process, it's better [for] Aotearoa because we're relying less on traditional forms of heating and energy.”
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