AIB launches new ‘green mortgage’ for low energy homes
The market for ‘green mortgages’ continues to grow with the announcement by AIB that it is introducing lower interest financing for energy efficient properties.
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The bank will make a green mortgage with an interest rate of 2.5%, fixed for five years, available to new and existing customers whose homes achieve a building energy rating (BER) of between an A1 and B3.
Customers who meet the qualifying criteria will be able to apply for the rate either as part of their new mortgage application, or via the mortgage rate amendment process for existing customers. For a mortgage of €300,000 paid over 25 years, the rate will offer repayments of €1,210.56 per month compared to €1,258.47 per month for a standard five-year fixed rate, representing a saving of almost €600 per year.
“Climate change is the most important challenge facing this generation,” said AIB chief executive Colin Hunt. “We recognise that supports are needed to help change societal behaviour, and we will not be found wanting in helping our customers adapt and transition. The green mortgage is the latest in a series of propositions in which AIB is backing climate action.”
Meanwhile, the European Mortgage Federation is working with its 50 members — who include major banking and finance institutions from across the continent — to develop a standardised label for energy efficiency mortgages, according to a recent report on www.responsible-investor.com. The label is set to be launched next year and will provide customers with a clear and recognisable label for such mortgages. Its launch is expected to kick start a range of new green mortgage products across the continent.
It comes after Bank of Ireland launched new green loans and interest rates for homeowners earlier this year. These include a home improvement loan for energy efficient retrofits at a discounted interest rate of 6.5%, and a new green mortgage discount of 0.2% off any of the bank’s existing fixed interest rate mortgages, to finance the purchase, construction or renovation of A-rated dwellings