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Green mortgages are rising in popularity in Ireland

When it comes to mortgages, there are more than 250 products on the market in Ireland.

Some of the newest of these products are green mortgages. And they’re rising in popularity thanks to an increased focus on environmental matters.

Not all lenders offer green mortgages yet, but many do.

At Which Mortgage, our goal is always to find which mortgage is exactly right for you to achieve your property dreams. So let’s take a look at this type of mortgage.

Would a green mortgage be right for you? Who qualifies for one? Do they really help the environment?

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.

For example, Bank of Ireland’s green mortgage comes with a discount offer of 0.3% on all its fixed rate mortgage products from one to 10 years. 

AIB green mortgages offer rates from 2.1% for all A1 to B3 energy rated homes.

And Haven offers a green four year fixed rate mortgage

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.

Is a green mortgage right for you?

As mentioned above, our team has one goal only - to find which mortgage is the exact right fit for you.

We help hundreds of customers qualify for mortgages every month. On occasion, these are green mortgages.

If your budget supports you purchasing a home with a higher BER, a green mortgage could be right for you.

Likewise, if you have made upgrades to your existing home that have resulted in you improving your BER grade, switching to a green mortgage could be within your best interests.

Although green mortgages offer attractive rates, there are many other products on the market that offer even bigger discounts.

Our team will work with you to understand exactly what your circumstances are. 

We have relationships with nine lenders in Ireland, and we’ll always advise you on the right steps to take on your mortgage journey.

Contact us for a confidential chat about your mortgage requirements. We’d be delighted to discuss your mortgage options with you.

Claire Mason

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