Updated: Jun 2
Buying an energy-efficient home could be more affordable with a green mortgage. As Ireland works to minimize its carbon footprint, banks are offering lower interest rates to entice more homebuyers to go green.
These incentives are offered through green mortgages, which are getting increasingly popular with buyers around the country.
Symmetry Financial advisors are here to explain what a green mortgage is and how homebuyers can secure an affordable mortgage for an energy-efficient home.
What is a green mortgage?
A green mortgage is a type of mortgage with discounted rates for homebuyers who have an energy-efficient home. These discounts are typically 0.2-0.3% and are meant to make it easier to afford an energy-efficient home.
In the long run, homebuyers will also be able to save money on heating and electric costs by choosing an energy-efficient home, Conor Holland, director, ESG, KPMG in Ireland told The Irish Times.
To qualify for a green mortgage in Ireland, a property typically needs to have a Building Energy Rating Certificate (BER) rating between A1 and B3. BER ratings are determined by how much energy a home needs for heating, cooling, ventilation, water heating, and lighting.
Dwellings built in 2015-2022 tend to be more energy efficient than older homes, according to Ireland’s Central Statistics Office. Dublin County has the highest combined A and B BER rating while Leitrim, Roscommon, and Tipperary Counties have the lowest overall BER rating.
How do green mortgages work?
Green mortgages function the same way a traditional mortgage does, but green mortgages feature a discounted interest rate. That means a green mortgage could have a variable, fixed, or split interest rate depending on the type of mortgage product a buyer wants.
For example, a homebuyer could get a 0.2% discount on a five year fixed green mortgage from Permanent TSB or a discounted four year fixed rate mortgage from EBS. Both mortgages are called “green mortgages,” but they offer different term lengths.
To qualify for a green mortgage, a homebuyer will need to provide a BER report that shows the home has a BER rating between A1 and B3. These reports are valid for 10 years before the home needs to be re-inspected.
The BER report is required in addition to other documents one would have to provide for a traditional mortgage. Lenders may also require that you verify your income, assets, credit history, identity, and other information.
Note that a green mortgage may not necessarily be the cheapest option. A standard mortgage from one lender may actually be a better deal than a green mortgage offered somewhere else.
Symmetry Financial helps homebuyers get the best green mortgage
Choosing the perfect energy-efficient home is only one step toward home ownership. Buyers also need the right mortgage.
The financial experts at Symmetry Financial can help homebuyers locate and choose the best mortgage to purchase a home in Ireland.
Whether you’re choosing between a new, energy-efficient home or an older fixer-upper, our team of financial pros can assess your mortgage options and help you secure a deal that makes sense for your unique situation.
Mark Solon, founder, Symmetry Financial.