QBE has announced it will provide a 5% rate reduction on the cost of Lenders’ Mortgage Insurance (LMI) for National Bank of Australia (NAB) or Bank Australia customers who hold a green mortgage.

The benefit will be available to LMI holders who are purchasing or refinancing new or existing homes or seeking construction loans with green mortgages from either of the two partner banks.

Eligible loans will be required to have a loan-to-value ratio of 80% and meet lender and QBE’s requirements of having a NatHERS 7-star rating or Green Star Homes certification from the Green Building Council or Australia.

The decision aims to push more significant investment to address sustainable housing affordability.

“We know that making properties sustainable is not only good for the environment, but also adds value to homes, so we’re proud to be enabling new and existing homeowners to look after both their present, and their future,” QBE LMI GM Pat Priest said.

QBE says all revenue from discounted LMI premiums will be invested in its “Premiums 4 Good” initiative to support social and environmental benefits.

“We recognise the importance of addressing climate change and facilitating a resilient future for our business and our customers,” Ms Priest said.

“By directing premiums into social and environmental impact investments, we can make a difference to the communities and environment we live and work in and help achieve our purpose of enabling a more resilient future.”

NAB Home Ownership Executive Andy Kerr says the offer gives homeowners a way to push for sustainable living while also easing the cost of living pressures attributed to increasing energy costs.

“Through this initiative with QBE, we are making it easier for customers to reduce energy bills and home loan repayments with the choices they make on the type of home that they buy,” Mr Kerr said.

“Making buildings more sustainable is essential to addressing climate change. With Australian homes contributing more than 15% to Australia’s total emissions, this is a small but important move in the right direction.”

Bank Australia Deputy CEO John Yardley described the benefit as “another incentive” for people to make their homes greener.