Green Mortgage Interest Rate, Green Home Improvement Loan, and Green Business Loan introduced
Aim to encourage and reward energy-efficient homes, retrofitting of older properties, and SME and agri investment in energy efficiency
Bank’s Sustainable Finance Fund will make €1 billion of green loans available over the coming year
Bank of Ireland has today unveiled a suite of green loans and interest rates to encourage and reward home owners and businesses to be more energy efficient. The new initiatives include a green interest rate discount for borrowers buying or building energy-efficient homes, and a green home improvement loan for energy-efficiency retrofits for older properties. Businesses, including farmers, will also benefit from reduced rates for investment in energy-saving improvements.
They are part of the Bank’s Sustainable Finance Fund which will make €1 billion of green loans and discounts available over the coming year. This supports the Government’s Climate Action Plan and Ireland’s commitment to the United Nations Sustainable Development Goals. According to the Sustainable Energy Authority of Ireland (SEAI), over 1 million homes in Ireland need investment to make them energy efficient. Additionally, Irish SMEs spend more than €2 billion annually on energy, which could be reduced by 10% through greater energy efficiency.
The loans and discounts being launched today will support more sustainable energy use in Irish homes and businesses, and include:
Green Mortgage Interest Rate:
Borrowers can receive a discount of 0.2% off any of our fixed interest rate options (from 1 to 10 years) where a fixed term is selected at drawdown of the mortgage. This fixed rate discount will be available from drawdown on new borrowing to finance the purchase, construction, or renovation of residential buildings with an A-rated or to achieve an A-rated BER energy performance. Based on a 20-year €200,000 mortgage fixed for the first five years, the Green Mortgage Interest Rate would represent a saving of c. €2,085 over the five-year term.
Green Home Improvement Loan:
The Sustainable Finance Fund will also offer a Green Home Improvement Loan at 6.5% (Variable APR) for amounts from €2,000 to €65,000. Designed to fund energy-efficiency upgrades – for
example installing solar panels and retrofitting insulation – the Green Home Improvement Loan offers a discount on current rates from 0.3% to 2% (depending on loan amount). Based on a €15,000 loan, this discount would represent a saving of c. €418 over a five-year period.
Green Business Loan:
The Bank of Ireland Green Business Loan offers discounted finance to businesses who want to implement energy-saving initiatives to reduce their energy costs and their carbon footprint. A discount of 0.5% off the margin that the Bank applies to the Small Business Rate – for secured and unsecured loans, up to a maximum of €300,000 – will be available to customers who are subject to Small Business Rate loan pricing. Based on a €300,000 loan at the Small Business Rate, this discount would represent a saving of c. €5,925 over a 7-year period.
Commenting on the launch of the Bank of Ireland Sustainable Finance Fund, Gavin Kelly, CEO Retail Ireland at Bank of Ireland said: “Everyone has a part to play in addressing one of the most important issues of our time – climate change. Addressing this challenge means changing behaviour, and as a leading financial services provider in Ireland we can make a meaningful contribution to incentivising that change.
The Sustainable Finance Fund and the first of its new products announced today are designed to practically support our customers’ transition to a more energy efficient and sustainable future.
At Bank of Ireland, we want to play our part in Ireland’s response to this issue.”
The fund and products complement the Bank’s steps to reduce its energy consumption and ongoing support of the renewable sector. Bank of Ireland has committed to reduce its carbon emissions intensity by 50% by 2030 as part of the Low Carbon Pledge, and by the end of 2018 had achieved a 23% reduction in emissions from 2011 levels. The Bank is also a leading lender to
the renewable energy sector financing wind projects which provide the equivalent of c. 450,000 homes with green energy.
The Green Mortgage Interest Rate and the Green Home Improvement Loan will be available from 18 July 2019. The Green Business Loan will be available
from 24 July 2019.
Notes to editor;
The Building Energy Rating or BER is an energy label with accompanying advisory report for homes. The rating is a simple A to G scale with A-rated homes being the most energy efficient. The Sustainable Energy Authority of Ireland (SEAI) estimates that raising a three-bed, semi-detached home from D on the BER scale to A would reduce the property’s annual energy bills from €1,850 to around €380, a saving of almost €1,500.
The Government’s Climate Action Plan, published last month, has set out a target of upgrading 500,000 older homes to a BER rating of B2 by 2030 and of installing 400,000 heat pumps. Since 2012 new properties in Ireland typically have a minimum rating of A3.
The lack of funds is one of the main obstacles to consumers investing in energy efficiency measures for their home, according to the SEAI. More than 70 percent of Irish consumers who had researched energy efficiency measures but not proceeded with them cited this as the reason, according to an SEAI survey.
Green Home Improvement Loan
Over 18’s only. Lending criteria, terms and conditions apply to Green Home Improvement Loan. Proof of work being undertaken will be required.
Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.
Green Business Loan
Over 18’s only. Lending criteria, terms and conditions apply to the Green Business Loan. Security may be required. Borrowers may need to confirm or provide proof of work being undertaken to enhance sustainability or retro-fit their business in order to qualify for a Green Business Loan.
Warning: The cost of your repayments may increase.
Warning: If you do not meet the repayments on your credit facility agreement, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.
Green Mortgage Fixed Interest Rate
Green Mortgage Fixed Interest Rate Terms and Conditions
The Green Mortgage fixed interest rate is a discount (reduction) of 0.20% that we apply to our standard mortgage loan fixed rates.
The Green Mortgage fixed interest rate is available to you if you:
- are buying a property that has a Building Energy Rating (BER) of A3 or better or are borrowing to
build or up-grade your home so that it has a BER rating of A3 or better,
- AND provide us with the BER certificate showing a rating of A3 or better before you draw down the loan (where you are borrowing to pay for building works, you provide us instead with specifications showing that rating will be achieved, and you provide the BER certificate once building works are complete),
- AND draw down your new mortgage loan between 19 July 2019 and 30 June 2020.
The Green Mortgage fixed interest rate is available only if you choose a fixed interest rate that begins when you draw down your mortgage loan. It is not available with any of our variable rates.
The Green Mortgage fixed interest rate will apply to the mortgage loan for the period of your chosen fixed rate from the date the loan is drawn down. Our standard interest rate options for existing customers will apply at the end of that initial fixed rate period (so the discount ends then).
Full terms and conditions of your mortgage loan will be set out in your mortgage loan documentation including your Letter of Offer except that it will refer you to the dates for drawdown that we have set out above (so you need to take careful note of them and to bring them to the attention of your solicitor or builder if necessary).
The Green Mortgage fixed interest rate is not available (a) on a mortgage loan where it (or part of it) is used to repay an existing mortgage loan from a lender whether the lender is in the Bank of Ireland Group or not (for example, this means the discount is not available for mortgage loans where you switch a mortgage loan to us from one of our competitors); or (b) on mortgage loans to buy a residential property with a BER rating of B or lower; or (c) to build or up-grade a residential property to a BER rating of B or lower.
- the first drawdown must be made between 19 July 2019 and 30 June 2020 to qualify for the Green Mortgage fixed interest rate,
- AND you must provide a detailed specification from your builder showing work to be undertaken to achieve a BER rating of A3 or better.
We reserve the right to withdraw the Green Mortgage fixed interest rate at any time at our discretion. If we withdraw the Green Mortgage fixed interest rate before 30 June 2020, we will notify the public of this by putting an advertisement on our website and in at least one national newspaper.
The lender is Bank of Ireland Mortgages. Lending criteria and terms and conditions apply. A typical mortgage to buy your home of €100,000 over 20 years with 240 monthly instalments costs €615.79 per month at 4.2% variable (Annual Percentage Rate of Charge (APRC) 4.3%). APRC includes €150 valuation fee and mortgage charge of €175 paid to the Property Registration Authority. The total amount you pay is €148,114.60. We require property and life insurance. You mortgage your home to secure the loan. Maximum loan is generally 3.5 times gross annual income and 80% of the property value (90% of the property value for first-time buyers). A 1% interest rate rise would increase monthly repayments by €54.02 per month. The cost of your monthly repayments may increase – if you do not keep up your repayments you may lose your home. Available to over 18s only. Bank of Ireland Mortgage Bank is not responsible for information on third party websites.
Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages is regulated by the Central Bank of Ireland.