Should your mortgage cover solar and battery storage, too?

A start-up mortgage broker is pushing for major lenders to bundle home loans with finance for solar and storage, arguing that it would benefit all parties by boosting the value of properties, and the cashflow of mortgage holders.

Digital mortgage service Uno Home Loans says high energy prices and low interest rates have led it to focus on how much money new home owners can save by installing solar panels and battery storage – even if the investment adds to the size of their mortgage.
Based on calculations using NSW feed-in tariffs and energy costs, and current record low interest rates, the company claims that a homeowner with a $600,000 mortgage who borrowed $16,544 to install solar and storage would be more than $1800 better off a year (even after interest costs were netted off).
The model takes into account cost of solar, the reduction in power bills, and the incremental interest paid.
“This has come about because we’ve reached a tipping point of high energy costs combined with low interest rates – meaning that solar now makes sense financially even for those people who need to borrow to fund the installation,” said Vincent Turner.
These two factors, combined with the continual reduction in cost of the technologies, Turner said made it “an absolute no-brainer to do this if you’re a home owner.
“We’re trying to get the lenders to change their policy,” he said in an interview with One Step Off The Grid on Tuesday.
“Solar and storage means the cashflow of house will be better. So why wouldn’t they factor that in?
“We can show (lenders), mathematically, that (their) customers will be better off if they take a bit more money (to add solar and storage). You can put it down to home improvement.”
Turner also noted that for some mortgages, adding the amount needed to install solar and battery storage could push the loan into a bracket that required mortgage insurance to be added, potentially putting some household off making the investment.
“Penalising someone for adding something that is going to add value to the home and cash flow to the home doesn’t make sense,” Turner said, although he noted that he had battled to find any data in Australia confirming that solar added to a home’s resale value.
“We’d love to get more people on to solar and storage,” Turner said. “If the lenders don’t get on board, we’ll have to do it ourselves,” he said.

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