A few weeks ago our Resource Consent was approved so we are all good to go and build. Hurray.
Reasons behind building a small sustainable home are not only reducing the environmental footprint of the home, live a lifestyle based on what you really need but also to keep our debt down and avoid being sucked into a large mortgage with high monthly payments. In receiving the first quotes from different builders we might as well chuck the goal of “affordability” out of the window with some shocking quotes. New Zealand is known for high building prices and the ongoing building boom isn’t very helpful either in keeping prices down.
No point in whining, it is what it is and we are past the point of no return. If we want a new roof over our head in a comfortable warm home we have to bite the bullet and knock on banks doors for a loan.
Pretty late in the game I discovered that a loan to build your house is different from a home loan. When you are building a home you need a construction loan and with these there are no fixed rates or revolving credit options. They are loans on a floating interest rate and once your build is complete you can switch to a regular home loan.
350 Aotearoa https://350.org.nz researched which banks and Kiwisaver programs in NZ have investments in fossil fuels and made overviews of these.
There are some smaller loan providers who had good floating interest rates, see an overview on https://www.mortgagerates.co.nz, and don’t have investments in fossil fuels but they didn’t offer construction loans.
At the moment our application for a loan is with the credit team of Kiwibank. Our selection was based on:
- A good floating interest rate
- No investment in fossils fuels
- Availability of a construction loan
- Options for a green/sustainable loan for our home loan once the build is finished
We could also argue as we are needing a loan and not put savings in a bank it would have been better to get a loan with ANZ as at least they would loan the money to a green home and can’t invest it in a billion dollar fossil fuel project.
Besides Kiwibank I haven’t been able to find any other sustainable loans. Westpac was supposed to launch one but can’t find anything on their website.
Green home loans are pretty common overseas where you get a better interest rate if your house is more energy efficient or you get a discount for measures to green your home. It would be a perfect way in NZ where banks could help and influence the market and reward better quality, healthier, dry, comfortable and energy efficient homes in a country where the housing market is dominated by low quality, drafty, unhealthy homes with the absence of proper building code regulations.
We are looking forward to receive proposals from banks for a green loan in the following months!
One peculiar thing about the sustainable energy loan from Kiwibank is that you get funding for solar panels, wind turbines, small scale hydro or geothermal energy. Off course happy with this support but improving the quality and energy performance of a home starts, besides good orientation, solar gain in winter and shading in summer with better insulation, airtight design, better windows and energy efficient hot water heating options. Measures where you would expect to get credits for in a green loan which is currently not the case. My first attempt to address this in our meeting with the bank wasn’t very successful so a couple more rounds to go….