Green homebuyers can avail of lower rate mortgages and loans

Irish homebuyers can now save money on their mortgage as well as their heating and electricity bills if they choose a sustainable, energy efficient home. That’s because they can qualify for Bank of Ireland’s Green Mortgage fixed interest rate with a discount of 0.2 per cent off any of the bank’s fixed interest rate options between one and 10 years, where a fixed term is selected at drawdown of the mortgage.

The Green Mortgage fixed interest rate is available to borrowers buying or building energy-efficient homes while a green home improvement loan is available for energy-efficiency retrofits for older properties.

The Green Mortgage fixed interest rate is available to people buying a property with a Building Energy Rating (BER) of A3 or better or who are borrowing to build or upgrade their home so that it has a BER rating of A3 or better, and who draw down the mortgage before June 30, 2020.

A BER is an energy label which comes with an accompanying advisory report for homes. The rating is a simple A to G scale with A-rated homes being the most energy efficient. The Sustainable Energy Authority of Ireland (SEAI) estimates that raising a three-bed, semi-detached home from D on the BER scale to A would reduce the property’s annual energy bills from €1,850 to around €380, a saving of almost €1,500.

According to Bank of Ireland, based on a 20-year €200,000 mortgage on a fixed interest rate for the first five years, choosing the Green Mortgage Fixed Interest Rate could mean saving around €2,080 over the life of the loan, compared with a 5-year fixed rate with no discount.

The Green Home Improvement Loan

The Green Home Improvement Loan is available at 6.5 per cent variable APR for amounts from €2,000 to €65,000. Designed to fund energy-efficiency upgrades such as the installation of solar panels or insulation, the Green Home Improvement Loan offers a discount on current rates from 0.3 per cent to 2 per cent, depending on the loan amount. The repayments on a Green Home Improvement Loan of €15,000 over 5 years are €291.86 per month based on a variable rate of 6.5 per cent APR. The total cost of credit is €2,511.60. This discount would represent a saving of €418.20 over a five-year period when compared with the non-discounted rate.

To qualify for a Green Home Improvement Loan, works being undertaken must include one of the following: solar panels; attic, floor or wall insulation; pipe insulation; sustainable water or heating systems; a boiler upgrade; installation of energy efficient controls in the home; door or window replacement; or a deep retrofit.

There is also the environmental impact to be taken into consideration. The majority of existing housing stock is energy inefficient with 78% having a C2 BER or worse. A report on energy efficiency by the Sustainable Energy Authority of Ireland in 2018 found that the Irish housing stock is among the most inefficient in Europe, with carbon emissions from Irish homes almost 60 per cent higher than the European average. This serves to further highlight the importance of knowing how energy efficient a home is and of seeking to improve it if relevant.

The Green Mortgage fixed interest rate and Green Home Improvement Loan are part of a new programme announced earlier this year by Bank of Ireland and is part of the bank’s long-term approach to improving the financial wellbeing of consumers in Ireland.

The Bank of Ireland Sustainable Finance fund is a key element of the programme and rewards homeowners for going green by offering them an opportunity to make savings through a green interest rate discount.

“Everyone has a part to play in addressing one of the most important issues of our time – climate change,” says Brian Vaughan, head of mortgages at Bank of Ireland. “At Bank of Ireland, we want to play our part in Ireland’s response to this issue. Addressing this challenge means changing behaviour, and as a leading financial services provider in Ireland we can make a meaningful contribution to incentivising that change. The Sustainable Finance Fund, Green Mortgage fixed interest rate and Green Home Improvement Loan are designed to offer practical support for our customers’ transition to a more energy efficient and sustainable future.”

Bank of Ireland has also become a signatory of the United Nations Environment Programme Finance Initiative (UNEP FI) Principles for Responsible Banking. “Conducting our business in a responsible and sustainable way is fundamental to enabling our customers, colleagues and communities to thrive,” says Vaughan. “Our research clearly indicates that Irish people are increasingly concerned about environmental issues impacting their lives and believe that banks need to do more. Becoming signatories of the UNEP FI Principles for Responsible Banking is a key step in Bank of Ireland’s responsible and sustainable business journey, signifying our commitment to be part of the global drive for more responsible banking operations.”

“Customers want practical ways to help them make greener decisions,” he adds. “That’s why earlier this year we launched a suite of green loans and interest rates to encourage and reward homeowners and businesses to be more energy efficient,” says Vaughan. “As a company, we have also made strides in transforming our own operations and reducing our property and carbon footprint. Of course, we are still at the early stages and by signing the United Nations’ principles, Bank of Ireland’s sustainability roadmap is clearly defined and benchmarked against others across the global banking industry.”

Warning: The cost of your monthly repayments may increase.

Warning: If you do not keep up your repayments you may lose your home.

Warning: You may have to pay charges if you pay off a fixed–rate loan early.

Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.

Green Mortgage fixed interest rate available on qualifying mortgages with (first) drawdown between 18 July 2019 and 30 June 2020. At the end of the initial fixed rate period customers can choose from the normal interest rate options available to existing customers at that time. Terms and conditions apply. The Green Mortgage fixed interest rate is not available to Switchers.

The mortgage lender is Bank of Ireland Mortgages. Lending criteria and terms and conditions apply. A typical mortgage to buy your home of €100,000 over 20 years with 240 monthly instalments costs €615.79 per month at 4.2% variable (Annual Percentage Rate of Charge (APRC) 4.3%). APRC includes €150 valuation fee and mortgage charge of €175 paid to the Property Registration Authority. The total amount you pay is €148,114.60. We require property and life insurance. You mortgage your home to secure the loan. Maximum loan is generally 3.5 times gross annual income and 80% of the property value (90% of the property value for first-time buyers). A 1% interest rate rise would increase monthly repayments by €54.02 per month. The cost of your monthly repayments may increase – if you do not keep up your repayments you may lose your home. Available to over 18s only. 

Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages is regulated by the Central Bank of Ireland.

The green home improvement loan lender is Bank of Ireland. Bank of Ireland is regulated by the Central Bank of Ireland.