$40,000 Loan at 0% Interest (for 5 Years) for Energy Efficient Home Improvement @ Westpac (Choices Home Loan Customers Only)


Last month this neat deal was posted and it made me look into what my bank, Westpac, provided. At the time Westpac only offered $10,000 interest free for five years toward home improvements but I see they have now bumped the total up to $40,000. Note this is only available to new or current Westpac Choices Home Loan customers.

Beat the chill with a Westpac Warm Up loan. You could get up to $40,000 interest free for five years to invest in heat pumps, insulation and more.

How it works:

  • A Westpac Warm Up loan is available to people living in their own homes and to landlords. You can use it for any mix of insulation, eligible heat pumps, double glazing, ventilation, wood burners, electric vehicle chargers, solar power systems and batteries for storing power from solar (or other sources).
  • A professional installer must fit the items. If you apply for a Westpac Warm Up loan, you'll need to show a quote that is less than 90 days old to obtain a pre-approval from us.
  • You can choose a fixed single-split heat pump system, multi-split heat pump system or a ducted heat pump system. Other types, such as portable heat pumps and heat pump water heaters, are not eligible. To find the most energy efficient heat pumps, use the Rightware tool by Energy Wise.
  • Please refer to the guidelines from the Ministry of Environment for information on sustainable wood burners.
  • If you change your mind and want to fund additional eligible renovations, you can apply for additional Warm Up loans provided it does not exceed the $40,000 limit across all Warm Up loans.
  • A Warm Up loan is interest-free for five years. If you’re unable to meet your repayments, a default interest rate of 5% will apply to your outstanding loan balance.
  • As a Warm Up loan is secured against a home or investment property, that property may be subject to a mortgagee sale if you default on your loan and it’s not possible to work through a solution with our hardship or collections teams.

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    • +2

      Not for mortgage free people. This is only available to new or current Westpac Choices Home Loan customers.

    • +9

      So get out there and start offering interest free loans to people for mortgages.

      It's a brilliant, well thought through idea, so it should not be hard for you to find people willing to finance it, cover off the costs, and put all the other banks out of business.

      Let us know once you have it up and running - I'd be happy to stop paying interest to our bank, and get an interest free mortgage.

      • -1

        Ill take the sarcasm on board, we both know that someone posting in cheapies is not going to be financing people's home loans.

        I would like to add just for fun of doing a troll, Westpac or any other bank could do this and gain more customers even if it was 1% or something else, but then I suppose your going to have some bureaucracy, corrupted regulators come in and stop that.

        Peace out holmes.

        • +2

          Nope - nothing regulatory stopping them offering free (or even really cheap) home loans.

          Perhaps, if we turn our minds to it, we might find another reason.

          In the meantime, let's ask around people who have savings in the bank, even small amounts for a rainy day, and get them on-board to provide their savings for free, and forgo the interest they are currently earning. That, at least, should be easy.

          • @Alan6984: Ok, I get the thread is mostly /s, but for

            In the meantime, let's ask around people who have savings in the bank, even small amounts for a rainy day, and get them on-board to provide their savings for free, and forgo the interest they are currently earning. That, at least, should be easy.

            I’ve actually been obsessing with this for a while. Offset mortgages are a thing. I’d love to see a way for people to help offset someone else’s mortgage (friend/family) without becoming a guarantor. Saving someone ~6%pa > earning measly interest subject to tax!
            …too bad I can’t take advantage of this because I’m “mortgage-free” (not an owner but a renter for 13 years lol)

            • @eh: Kiwibank let you use any kiwibank account as offset, doesn't have to be your own.

            • +1

              @eh: If you just lend them the funds, they pay it off their mortgage, and they pay you, say, half the difference between what you would have gotten, and what they would have paid, you would, doing it like that, be an implicit guarantor (and, as you say, you don't want to become that).

              If you weren't guaranteeing their liability (to the bank) though, and the bank was allowing an offset, then consider it from the bank's perspective if they default - the bank did not get paid a market rate of return (they only charged interest on the reduced amount), but took the risk on the full amount prior to offset (if you are not guaranteeing or taking any risk, the risk must have been borne by the bank), so what would the bank actually do (if they were even willing to entertain this approach) - they would increase the interest rate to compensate for their risk / return.

              Ultimately, there are no free lunches to be had - the overall costs, including the default risk cost, have to be borne somewhere, and the interest charged is what the market (being everyone involved - all lenders and borrowers in the market at any given point in time) collectively price that total cost (including risk) at.

  • +2

    On paper it looks like they are helping people out but in our experience that is about all it does- looks good.

    We tried to get this earlier in the year and were declined, we have approximately 800k equity in our house, one good solid income with all the insurances..life,income,heath,home,contents,car, we only have one interest free student loan and one 10k credit card which is always paid off no other debt (except our mortgage of course) then we opt to pay the highest amount on our mortgage and have done for the last 4 years, we also have a decent sum in shares. Our only fall down is we have hardly any savings as we are putting them to renovating… so my question is if it can’t help people who have everything except savings what is the point!? Surely people who have all that and savings don’t need it…

    Only exists to look good. Would be interested to be proved wrong.

    • +2

      We got this loan early this year but for less than half of the 10K on offer. Added moisture barrier and underfloor insulation.

      We were/are thinking about adding solar so it would be nice if we could get it for that too. Not sure though.

      • You can get it for solar - both panels and a battery, but you will have to pay off your current warm up loan first

        • Yeah, that's what I thought too.

    • +2

      You know expenses like insurances count towards your outgoings? If you have enough outgoing, no matter what it's for, what they'll lend will obviously be reduced. If you have no savings, what that shows the bank is that you don't have spare money. So providing more lending doesn't really stack up.

    • Earlier in the year all the banks knee jerked the harshness of new loan applications because of the changes the govt made to "safe lending practices". Remember in the news how banks were telling FHB to stop getting Netflix, stop getting takeaways etc. The same applies for people with current loans but asking for a top up.

      I understand a lot of that knee jerk reaction has eased off now so you'd probably find you'd now get a top up like this if you asked.

      • The rules were changed (again) on, I think, 7 Jul 2022 (not sure of the exact date) to relax the amount of digging that the lender is required to do, so it has eased off, but not because it was a 'knee-jerk' reaction in the first place. Lenders always push down the level of requirements as far as they think they can get away with - it is in their best interests to do so if the regulations are stricter than the marker alone would impose.

        Having said that, the regulations are still more strict than they were prior to Nov 2021, so all other things being equal, you'd still expect to see lower levels of loan approvals than before the first set of regulatory changes.

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