What is a green mortgage
Although different lenders have different options, a green mortgage offers lower interest rates to buyers who are purchasing an energy efficient property.
In practice, what this means is that you purchase a home with a B3 Building Energy Rating
(BER) or higher.
The lenders offering this type of mortgage include AIB, Haven, Bank of Ireland and Ulster Bank (though Ulster Bank is withdrawing from the Irish market). These lenders offer green mortgages for new builds or second-hand homes. The only requirement to qualify for a green mortgage is meeting the minimum BER standard.
Green mortgage discounts on offer
Ireland’s wider mortgage market offers so many products, with many different cashback
offers and discounts.
The lenders offering green mortgages all offer unique products too.
The savings on offer can really add up over the term of the mortgage.
Some green mortgages can offer you a few thousand Euro of savings over the mortgage term with their discounts. This is tax-free cash in your budget.
Can you apply for a green mortgage?
The only requirement to qualify for a green mortgage is to meet the BER standards of B3 or higher.
Whether you are a first-time buyer or a mover, or even a mortgage switcher
, you can avail of a green mortgage. Likewise, new build homes, second-hand homes and even if you’re building your home yourself - all qualify for green mortgages provided the energy rating is met.
You can also qualify for a green mortgage if you make energy efficient improvements to your existing home. With any BER upgrades to B3 or higher, your mortgage can be converted into a green mortgage. We can help you do this.
Remember, there are a lot of grants that can help you improve your home’s energy rating.
Are green mortgages all about greenwashing?
This question can be a difficult one to answer.
On the one hand, all actions to safeguard the environment should be encouraged.
On the other hand, as the environment has become a bigger topic of discussion, there has also been a rise in greenwashing. This is a term that is used to describe how some organisations are using marketing and PR tactics to look like they’re following a green agenda but are not really doing so.
Green mortgages offer lower interest rates for more energy efficient homes. No more and no less.
This type of mortgage is not a loan that is backed by any kind of environmental initiative, such as planting more trees or carbon offsetting schemes. Some lenders may be doing this, but the green mortgage products are not tied to these schemes.
An argument can be made that a green mortgage incentivises buyers to purchase more energy efficient homes. Or upgrade their existing home so that their energy rating is improved.
This obviously contributes to lower carbon footprint as the homes use less energy. And this is a positive for the environment.
However, in Ireland, by law, all new homes built since 2019 need to be A2 rated or above.