Green mortgages: sustainability brought to mortgage loans

The decarbonization and sustainability goals are reaching every corner of the economy. Also to the bank. This is the case of the so-called green mortgages, a type of mortgage credit aimed at rewarding the sustainable rehabilitation of buildings and also the high degree of energy efficiency of buildings.

What is a green mortgage?

The Green Mortgage arises from EeMAPP, a pan-European initiative coordinated by the European Mortgage Federation (EMF-ECBC). According to Diego Soldevilla, Director of Energy Consulting and Building of TINSA, aims to encourage “the preferential acquisition of efficient properties through favorable financing conditions.”

Thus, the expert continues “this initiative, developed with funds from the European Community, is intended to finance the acquisition, construction or renovation of residential and tertiary buildings where certain requirements are met.”

What features must a property have to access a green mortgage?

In order to access a green mortgage, a property must meet two requirements. The first, Soldevilla indicates “that the energy performance of the property in question reaches or exceeds the best market standards in accordance with current regulations.”

This means that for new construction, the energy consumption of buildings must be 20% lower than that set by the Technical Building Code. In the case of buildings already built, Diego Soldevilla affirms that “the energy rating must be among the most efficient 15% of the national stock of properties.”

The second premise concerns rehabilitation. In this sense, they will be able to access green mortgages when an energy improvement is carried out through rehabilitation so that “a reduction of at least 30% of non-renewable primary energy consumption is achieved,” adds the expert.

These improvements will be certified by means of a technical report. Let us remember that the energy efficiency certificate is mandatory to be able to sell a property, so if we make a reform we will have to request it again.

What are the benefits of the green mortgage?

Normally the benefits depend on each bank, that is to say on the preferential conditions that they have designed in their product. And although not all currently have a product of this type, it is increasingly common to find this type of mortgage loan among a bank’s product catalog.

Regarding the appraisal, Soldevilla affirms that “currently the ECO standard for mortgage appraisal does not consider the result of the energy efficiency certificate as a parameter for the formation of the value. However, it continues “it is possible that there may end up being possible tax benefits for efficient buildings”, given the greater economic savings that it represents in our energy bills and the growing environmental awareness among the population.

Little by little, adds the expert, “they will make energy efficiency an essential element in choosing a property for rent and sale and therefore the market, thus reflecting on the value.”

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