EU could offer energy efficient homebuyers better mortgages

Homebuyers across the EU could be offered better borrowing rates on mortgages in return for purchasing more energy efficient homes or committing to implement energy saving work within properties as part of a “ground-breaking” new project.

The European Energy Efficiency Mortgage initiative is aiming to create a standardised “energy efficient mortgage” based on preferential interest rates for energy efficient homes or additional funds for retrofitting homes at the time of purchase.

The scheme has been cited as the first ever collaboration between groups of major banks, mortgage lenders, businesses and organisations from the building and energy industries for the purpose of addressing the concept of energy efficient mortgages, with the project having been launched by a consortium led by the European Mortgage Federation (EMF) and the European Covered Bond Council (ECBC).

Partners of the project include the Ca’Foscari University of Venice, RICS, European Regional Network of Green Building Councils, E.ON, and SAFE Goethe University Frankfurt.

Commenting on the new initiative, Luca Bertalot, EMF-ECBC Secretary General, 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.”

The World Green Building Council (WorldGBC) claims that creating a private bank financing mechanism to encourage improvements in the energy efficiency of households is a key means of helping the EU to meet its energy saving target of 20 per cent by 2020 and to deliver on the ambition of the Paris Agreement reached at COP21 last December.

James Drinkwater, Europe Regional Director, World Green Building Council, believes the Paris Agreement has set a course to keeping global warming to within 2 degrees, but organisations will need to develop innovative ways of financing energy efficiency in Europe’s homes if we are to stand any chance of meeting that goal.

“Mortgages which reward consumers and investors by recognising energy efficiency represent one such way, and will undoubtedly play a key role in helping to achieve our ambitious climate change targets,” he said.

Emmanuel Normant, Vice-President for Sustainable Development at Saint-Gobain, which is on the project’s Energy Efficiency Committee and is a Partner of the European Regional Network of Green Building Councils, added: “As we need to speed up progress to meet our climate ambition, Saint-Gobain welcomes this timely initiative which has the potential to accelerate the uptake of renovation in Europe.

“Forging a common understanding of the value of energy efficiency between all players and private banks is an essential step to unlock investment in energy efficiency."

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