Energy-efficient homes may reduce mortgage payments

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A European initiative could mean that buying an energy-efficient home or making a home greener may result a lower mortgage interest rate, according to a September 2016 article.

The European Energy Efficiency Mortgage initiative has been launched by the group European Mortgage Federation – European Covered Bond Council (EMF-ECBC). This initiative aims to establish reduced mortgage interest rates for greener homes, or for people undertaking energy efficiency upgrades at the time of purchase. The initiative is supported by European leading banks including HSBC, and representatives from the industries it impacts, such as energy and construction.

According to the article, buildings in Europe use 40% of Europe’s total energy consumption and 36% of CO2 emissions. It is estimated that making homes more efficient could reduce energy consumption by between 5% and 6%, and lower CO2 emissions by 5%.

In Britain, there have been various government incentives for householders to install energy-saving measures, such as loft insulation and energy-efficient boilers. Lowering commercial mortgage rates and standard mortgage rates for energy-efficient properties could be a further incentive to make homes greener and reduce the pollution that could affect climate change.

The Secretary General of the EMF-ECBC, Luca Bertalot, said:

“We have the responsibility to design a sustainable environment for future generations by developing a pan-European mortgage financing mechanism according to which energy efficiency investments are made more accessible and affordable for consumers and institutional investors and the subsequent energy efficiency improvements reduce risk for banks, creating a win-win for all involved.”

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