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The cost-benefit of owning an eco-friendly home is a significant drawcard to Australians keen on paying down their mortgage faster.
Although the upfront costs of investing in environmentally-friendly features can be high, a study commissioned by Sustainability Victoria shows that sustainable technology has reached a tipping point. Now the financial benefits of building and living in environmentally friendly homes outweigh the initial costs over the lifespan of the home.
The zero carbon study concluded that additional up-front investment in sustainable features could allow for faster mortgage repayment through energy and water savings. A combination of high-level thermal performance, efficient appliances, on-site power generation, electric vehicles, energy management systems and water efficiency could save households more than seven years and *$120,000 off a typical mortgage.
Of course, the number of years saved on your home loan will vary according to the interest rate and the size of the deposit, but the example provides a good illustration of the significance of the potential saving.
A pilot program in Victoria will see home builders and land developers work with the government to build new homes that have zero carbon emissions. The houses will be constructed with in-built solar panels, high-performance thermal insulation, double glazed windows and highly efficient lighting, heating and cooling systems and appliances.
This type of eco-friendly technology is expected to become standard practice across the Australian home construction industry as energy prices continue to rise and green features become increasingly attractive to home buyers.
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A recent three-year project by Queensland University of Technology and real estate franchise, PRDnationwide, found that sustainable buildings outperform their competitors environmentally, socially and financially. Here are some of the benefits of having a property with sustainability features, according to the project:
- More savings on utility bills and less maintenance. Energy savings of 3-32% in 2020 based on 6 star sustainable, energy-efficient homes.
- Fewer days to sell listed property.
- Higher median price. Median house prices of properties with recorded sustainability features (such as solar panel or watering systems) are at least 10% higher than properties without recorded sustainability features.
- Higher resale value.
Practical ways to green your home and save
Every green upgrade you make to your home has the potential to bring savings to your household budget. Put this extra cash towards your mortgage, and you’ll be on the path to paying off your home loan sooner. Here are some ideas:
Switch to compact fluorescent light bulbs: Saving: they use a quarter of the electricity of incandescent bulbs and last significantly longer.
Install solar panels: Saving: offset your electricity bill.
Switch at least one item to an energy efficient model: Saving: the difference in annual energy costs between one dishwasher to another can be $97.45 per year.
Shade windows and install eaves. Saving: heat gain through an unshaded window in summer can be 100 times greater than through the same area of insulated wall.
Open ventilation passageways to improve airflow. Saving: reduced cooling costs.
Install insulation. Saving: in winter, uninsulated homes lose 25-30% of their warmth through the roof.
Seal gaps. Saving: draughts can account for up to 25% of heat loss in winter.
Plant an edible garden. Saving: less store-bought vegetables.
Choose native plants in your garden. Saving: less water usage.
Install a rainwater tank. Saving: Recycle water for washing machine, flushing toilet and watering the garden.
Buy some backyard hens. Saving: Free eggs and fertiliser (plants thrive on chicken manure) and no more pesticides (chickens eat bugs).