Are you looking to renovate your home or rental/investment property to make it more energy efficient and warmer for Winter?
Cost is often a barrier to making home improvements. Some banks are now making it easier for clients to make their homes warmer and more energy efficient: many banks are now offering current and new customers interest rates as low as 1% to help fund these upgrades to their properties.
BELOW IS A LIST OF SOME OF THE ENERGY EFFICIENT UPGRADES THAT ARE INCLUDED IN SOME OF THE SCHEMES:
- Double or triple glazing;
- Ventilation systems including heat recovery options;
- Ceiling, underfloor, or wall insulation;
- Heat pumps;
- Wood or pallet burners;
- Extractor fans;
- Solar power panels; and
- Hybrid or Electric vehicles.
HOW IT WORKS –
Different banks have different schemes and terms and conditions that apply. Your starting point is to check with your bank (or mortgage broker) what their particular criteria are, and whether you may be eligible for an “energy efficient” loan and whether your bank offers these schemes.
As a general guide, where you have an existing home loan with some banks, then you may be able to apply for an Energy Efficient “Top Up” Loan of up to $80,000.00 for any of the upgrades mentioned above.
- A top-up means that you borrow money on top of your existing home loan using the equity in your home. The Home Loan top-up can only be taken out as an additional loan on top of an existing home loan with your bank;
- The top up loan rate is only available to customers who have a minimum of 20% equity in their home. For residential property investors you will need to have a minimum of 40% equity in the property;
- With some banks the interest rate is fixed at 1% for three (3) years. After this fixed period ends, you can choose to either repay the loan in full or fix the remainder of the loan at the banks current fixed or floating rate at that time;
- Banks will generally require a minimum “top up” loan amount for energy efficient improvements of between $3,000.00 and $5,000.00 (depending on who you bank with);
- You should expect that the banks will require you to provide them with recent quotes or invoices from qualified professional providers and/or installers; and
- You should also expect that you will need to obtain any required consents from your local council in regard to your renovation upgrades before the loan will be granted.
One bank structures things a bit differently and offers an interest free loan of up to $40,000.00 for of up to five (5) years on the energy Efficient Upgrades mentioned above. There is flexibility to make lump sum payments or pay the loan off earlier without prepayment costs.
Before you begin the renovation process, a HomeFit self-assessment is a straightforward way to check if a home is warm, dry, efficient and safe. You can use it to check a home you’re looking to buy or rent, or if you want to know how you can improve your current home. It starts with a simple online check by visiting homefit.org.nz. Or you can contact an independent Home Fit Assessor who can visit your home to provide a detailed assessment and list of priorities.
These schemes are designed to help homeowners have a warmer, drier, more energy efficient home. Whether you need a loan, or a “Top Up” loan and think you may be eligible for any of these schemes our property team at Taylor Shaw are happy to help you navigate this process and/or advise you on any of the loan documentation before signing.