22 September 2016

An energy efficiency mortgage for greener buildings

An energy efficiency mortgage for greener buildings

On 20 September 2016, the building sector joined forces in the launch of a new mortgage scheme offering lower rates to buyers opting for more energy efficient buildings. In order to be eligible, buyers would need to commit either purchasing more energy efficient homes or to carrying out energy-saving retrofits to the property purchased.

On the one hand, this European Energy Efficiency Mortgage is beneficial to banks and investors in that it allows for loans which represent a lower risk on balance sheets, thus qualifying for a better capital treatment.  Banks would also be able to recognize energy efficient assets in their risk profiling thereby helping the market to price-in the added value of energy efficient real estate.

At the same time, such a private financing scheme could lend the EU a helping hand in terms of meeting its energy-saving target of 20% by 2020.

The project is led by the European Mortgage Federation – European Covered Bond Council (EMF-ECBC) and involves partners such as the European Regional Network of Green Building Councils.

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