Finance options for switching to electric

Green secured loans are designed specifically to help fund eco-friendly home improvements. These loans are usually secured against your residential property and often come with lower interest rates than standard personal loans. They’re intended to support energy-efficient upgrades, helping homeowners invest in sustainable changes while encouraging long-term environmental benefits. If you already have a mortgage, a good place to start is by checking with your current lender to see if they offer green loan options.

Pros:

• Typically come with lower interest rates
• Longer terms can mean lower regular repayments

Cons:

• Typically secured against your home
• Requires an existing mortgage

Unsecured green loans also support eco-friendly home upgrades, but don’t require your property as collateral. While their interest rates are generally higher than those of secured loans, they’re often lower than standard unsecured personal loans. These loans offer flexibility for homeowners who want to make sustainable improvements without tying the loan to their home.

Pros:

• Usually don't require security
• Can provide longer terms leading to lower regular repayments

Cons:

• Typically come with higher interest rates than secured loans

Zero-interest payment plans are an option for homeowners looking to install energy efficient appliances with no upfront costs. You can repay the amount over time, with no interest charged. However, these loans can include additional fees like establishment charges or monthly account-keeping fees. In some cases, the cost of financing may be built into the total price of the appliance or system, potentially increasing the total cost.

Pros:

• Typically flexible repayment terms
• Usually $0 interest charged to you

Cons:

• May include ongoing monthly fees
• Some charges can be passed onto the installer leading to higher installation prices

If you have an existing mortgage, you may have the ability to redraw from your existing mortgage or use funds from your offset account to pay for upgrades. This can be a convenient way to finance improvements using your existing home loan, often at your current mortgage interest rate. This approach typically won’t increase your home loan repayments, as you're using funds already available to you.

Pros:

• Makes use of your existing home loan setup
• Often doesn’t affect current home loan regular repayment levels

Cons:

• You’ll be charged interest at your home loan interest rate, which may be higher than some secured green loan rates

The Solar Homes Program offers eligible Victorian households solar panel (PV) rebates and the option of an interest-free loan. Find out more at the Solar Victoria website.