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As climate change and a cost-of-living crisis drive interest in green finance, brokers can capitalise on a growing market opportunity.
More than half of Australians plan to improve their homes’ energy efficiency within the next five years, as cost-of-living pressures and environmental concerns drive households to seek energy upgrades, according to PropTrack (part of REA Group).
PropTrack’s Origin Australian Home Energy Report 2025 found that home owners are planning to spend around $7,950 in the next five years on energy-efficient home upgrades, signalling a potential spend of more than $80 billion nationwide.
But the costs of being more green are a hurdle, with almost half (45 per cent) of respondents citing upfront costs as the biggest barrier to adopting energy-efficient features.
Amy Beattie, founder of mortgage brokerage Good Green Home Loans, which specialises in green finance, said brokers could benefit from surging interest in green home lending and improving education in this area.
“I think green home loans are highly misunderstood and it is a huge opportunity for brokers in a growing market to broaden their knowledge and attract more clients,” she told The Adviser.
“A ‘green home loan’ is a loan for the purpose of buying a highly sustainable home or making energy efficiency upgrades to an existing property. However, it can also be a loan to buy any property or to refinance another loan, with a bank whose environmental values align with the borrower’s values.
“As a broker, if you are knowledgeable about both types you will be in a great position to make the most of a growing cohort of borrowers who put their environmental values at the forefront of their decision making.”
What’s behind green lending growth?
A combination of the high cost of living and climate change, with the latter’s worsening impact on home insurance and lending risks, is driving more interest in green home lending.
PropTrack research found that of the 56 per cent of respondents who said they planned to improve their home’s energy efficiency within the next five years, 68 per cent were driven primarily by cost savings, while 55 per cent listed environmental concerns as the major motivator.
REA Group senior economist Eleanor Creagh said: “The rising cost of living has placed affordability at the forefront of household concerns, with homeowners and renters seeking solutions to reduce energy bills.
“Yet, upfront costs and knowledge gaps are significant barriers preventing many from adopting energy efficient features. By addressing these barriers effectively, we can accelerate the transition toward more energy efficient homes to benefit both the environment and household budgets.
“It’s clear that people with a good understanding of energy efficiency are more likely to make upgrades to their home and alter their behaviour to reduce energy use. This indicates that wider education is crucial to improving energy efficiency across Australia.”
Beattie agreed, saying: “There is a greater and more widely accepted knowledge about climate change and the urgency we need to see to slow it down.
“However, the cost of living would also be driving people’s interest in improving the efficiency of their homes. Better efficiency means lower bills, and we all need to find ways to reduce costs at the moment.”
Brokers can help break down barriers
Chris Raymond, the principal broker and founder of brokerage Unconditional Finance, told The Adviser: “We are seeing growing demand for green home loans, particularly from younger borrowers and those building new homes, driven by rising energy costs, sustainability awareness and attractive lender incentives.
“However, uptake is still limited by strict eligibility criteria, lack of awareness, and the upfront cost of green upgrades.
“As the market matures, brokers will play a bigger role in educating clients and helping them navigate green loan options that align with their values and financial goals.”
Marisa Hoffenberg, founder and mortgage broker at Sustainable Home Loans, said in comments to The Adviser that brokers needed to help borrowers understand the complexities of green lending.
“While the appetite for Green Loans has surged due to a growing commitment to sustainability and attractive incentives, navigating the landscape is complex,” she said.
“Lender criteria are stringent and offers vary widely. Though the rewards for borrowers are significant, it truly takes a specialist to get it right and unlock those benefits.”
Lenders are also playing a growing role in the green lending space.
Marie Mortimer, the chief commercial officer of non-bank lender Firstmac, which offers green home loans for upgrades like solar power, said a limited awareness of the available technologies was holding back some Australians from adopting energy-efficient house features.
"Many homeowners are put off by the initial expense of upgrades such as solar panels, even if they offer long-term savings," she added.
Looking ahead, Good Green Home Loans’ Beattie said that the role of brokers would change.
“I think the broker’s role in this space is evolving, I see more brokers with sections on their websites about what a green loan is and how they can support you if this is something you want, and the more that offer this service the more impact our industry can have on driving change, so it is a win win if we keep moving in this direction,” Beattie finished.
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