What are green mortgages, which banks offer them and what advantages do they have? At Aliseda Real Estate we tell you more about this type of financing that rewards the energy efficiency of homes.
Currently we have many types of mortgages that are usually classified by their fee, client, nature of the mortgage or type of property. In this way, people who are not experts in real estate issues often have a lot of confusion with the meaning of each of them and their implications.
Due to the rise of this type of mortgage, we hear more and more talk about green mortgages from both banks and individuals. An issue that has practically come hand in hand with the European Union and its multiple initiatives to reduce greenhouse gases in recent years. Thus, we want to detail what they consist of and what their advantages are.
What are green mortgages?:
Green mortgages are a type of mortgage loan that offers a lower interest rate the greater the energy efficiency of the home purchased. Therefore, the objective of this type of mortgage is to reward the purchase of homes that contribute to the preservation of the environment.
This type of guarantee can be requested by those who buy a new home with an A+, A and B <a href="/en/blog/sustainability/what-is-the-energy-efficiency-certificate">energy certification</a> in the case of some banks. They are also usually subscribed by those who carry out renovations and thus achieve an improvement in energy efficiency of at least 30%. In this way, the better the energy qualification of the homes, the lower the mortgage interest will also be.
Thanks to this type of loans, it has been possible to contribute to the reduction of emissions emitted in the countries of the European Union, encouraging the purchase of homes and raising buyers' awareness of the impact of the energy footprint on nature.
How are green mortgages different from traditional mortgages?:
Regarding its application, this type of mortgage works in a very similar way to traditional ones. Therefore, to request it, the bank in question will also require information about your income, budgets and construction projects, but when purchasing, you will also have to provide the Energy Certificate for your home.
As mentioned before, the benefits of a green mortgage are much greater than those of a conventional mortgage since they have lower interest rates.
Another of its main advantages is that banks require less savings from their clients to request them: while for a traditional mortgage, savings of 20% of the value of the property must be credited. In this way the bank finances only 80% of the purchase and sale. With a green mortgage, banks can only require 5%.
Otherwise, both the links (direct debit of receipts or income, contribution to pension plans, contracting insurance, etc.) and the terms of green and conventional mortgages are similar, and depend on each banking entity.
Which banks offer a green mortgage?:
Banco Santander was the first entity in Spain that was responsible for opening up in this new market. In 2019, the bank presented its first green loan for the acquisition of efficient homes, for which it subsidizes the interest rate by up to 10 basis points.
The financial institution Liberbank, offers a variable mortgage with an interest rate of 1.55% for the first two years and Euribor +0.69% from the third year, subsidized by 1.10 percentage points with linkage, only for homes with certification. energy type A.
Kutxabank is responsible for offering characteristic financing conditions for homes with type A or B energy certification, and green home insurance.
Just a few months ago, the BBVA bank launched its type of mortgage, called 'Efficient House', which offers a fixed interest rate for all those who are committed to sustainability and who buy a property with maximum energy efficiency, that is, only for the grade A.
Caixabank y Bankia:
Bankia, an entity currently belonging to Caixabank, also has a line of credit aimed at financing sustainable homes. In this case, mortgages have a bonus of 25 basis points, 0.25% compared to traditional loans
What benefits does a green mortgage have?:
Green mortgages will allow you, whether you are an owner or buyer, to obtain a loan with less interest and with better conditions than a traditional loan, such as a lower initial capital contribution.
This is an issue from which both parties benefit, both the buyers and the banks themselves. In fact, the latest studies have shown that green mortgages have a lower default rate than traditional mortgages, specifically 30% less.
Homes that are committed to the environment or efficient have a higher value in the real estate market. In this way, the buyer is assured a recovery of their investment in a much shorter time than they would face with another type of mortgage.
In short, green mortgages are a type of credit loaded with great benefits, both environmental and economic. The great challenge of the European Union with this type of loans is to make them competitive compared to the rest of the mortgages that we find in the purchase and sale of a home.
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