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Green Mortgages in Ireland

Green Mortgages in Ireland

Green Mortgages in Ireland

At a time when people are grappling with the impact of inflation and the cost of living crisis, it makes sense to cut back on household bills. With this in mind, mortgage repayments are the biggest expense for most homeowners in Ireland which is why switching to a green mortgage can be a shrewd decision.

But what is a green mortgage exactly? In this article, we take a look at what you should know about green mortgages and why switching to a green mortgage product can save you money.

Green Mortgages or

Lower Interest Rates for
“Green Buildings”

Green mortgage’ refers to a type of mortgage for buildings that meet a specific criteria for environmental standards. This type of mortgage offers terms which include a lower rate of interest or an increased loan amount to the borrower.

Green mortgages were first established to finance renovations for green buildings in Europe. This initiative was expanded to support sustainable development and then offered to homeowners and first-time buyers in the form of green mortgage products. The definition of ‘Green building’ depends on the Building Energy Rating (BER) which essentially rates the energy efficiency of a building between A and G with A-rated buildings being the most efficient.

 

This means that in order to qualify for a green mortgage, you need to be borrowing against either a new build or second-hand property that meets the minimum BER requirement of B3 or higher. Borrowers must produce a BER certificate in this respect which is no more than 10 years old and then satisfy other lender requirements as part of a green mortgage application.

 

It might be worth noting that banks are increasingly receptive to applicants with the appropriate BER certificate because the incentive works both ways

Green Mortgages or

Lower Interest Rates for
“Green Buildings”

Green mortgage’ refers to a type of mortgage for buildings that meet a specific criteria for environmental standards. This type of mortgage offers terms which include a lower rate of interest or an increased loan amount to the borrower.

Green mortgages were first established to finance renovations for green buildings in Europe. This initiative was expanded to support sustainable development and then offered to homeowners and first-time buyers in the form of green mortgage products. The definition of ‘Green building’ depends on the Building Energy Rating (BER) which essentially rates the energy efficiency of a building between A and G with A-rated buildings being the most efficient.

This means that in order to qualify for a green mortgage, you need to be borrowing against either a new build or second-hand property that meets the minimum BER requirement of B3 or higher. Borrowers must produce a BER certificate in this respect which is no more than 10 years old and then satisfy other lender requirements as part of a green mortgage application.

 

It might be worth noting that banks are increasingly receptive to applicants with the appropriate BER certificate because the incentive works both ways

About Green Mortgage Products

in Ireland

Green mortgage products are increasingly common in Ireland and currently available to buyers, movers and switchers at Bank of Ireland, AIB, EBS and Haven. While they offer clear financial benefits to borrowers, you might be asking yourself “what’s in it for the banks“? Well, quite a lot actually.

Green mortgages are good for public relations and great for the environment. This initiative puts the topic of sustainability in the mind of homeowners and aligns with climate change commitments in the Paris Agreement that pledge to increase the percentage of energy efficient buildings. But that’s not all because the ‘loan to value’ ratio is much more favourable for energy efficient buildings.

Studies show there is less risk involved for banks when it comes to borrowing against a green building. This is because green buildings are perceived to have more value over time than a building without a high BER rating and the borrower of an energy efficient building is also likely to be in a better financial position to make repayments in the future.

Simply put, green mortgages make sense for both parties and there is no apparent downside to the arrangement. However, the uptake on green mortgage products is still rather slow.

The Financial Benefit of ‘Going Green’ in Ireland

It’s true, some borrower’s are not yet convinced. In spite of the financial incentives, going green requires up-front investment and the sales pitch for green mortgage products is somewhat lacking. That is to say, the banks are still trying to figure out how to make the green renovation more attractive and to remove this sense of doubt by ‘normalising’ green mortgage products.

There is also the fact that many homeowners in Ireland have yet to consider switching to a better deal with an alternative mortgage provider. It’s possible to find these deals with a mortgage comparison tool but both the benefits and ease of switching mortgages is probably not as well-known as it could be.

It will take time for buyers and homeowners to catch on but borrower’s will eventually realise the financial benefit of a green mortgage and the savings one can make in the long term. After all, why pay more for your mortgage repayments when you can pay less? It’s an obvious way to save money.

Let’s examine a quick example to help illustrate these savings:

If you wish to borrow €250,000 over 30 years and have a 10% deposit, Bank of Ireland offers a fixed rate of 3% over a 5-year term which would bring the monthly repayment to €1,054. The green mortgage rate for this same amount is just 2.7% which would save you €40 per month for the duration of the loan. It might not seem like much at first but that equates to €2,400 over a 5-year term and all in the name of switching to a green mortgage product.

 

The above is just an example but you can compare offers on Switcheroo which features all of the green mortgage products currently available in Ireland.

Final Thoughts: Is a Green Mortgage Right for You?

If you can afford to renovate a green building or purchase a home with a high Building Energy Rating, you should consider switching to a green mortgage. Once again, it might not seem like a lot at first glance but these savings add up over time and certainly make a difference over the term of a mortgage.

At the same time, it’s important to compare other types of mortgage products because it’s sometimes possible to find a better non-green rate depending on the amount you borrow. You might also want a longer term than 10-years or the cash back which some people like to use to cover mortgage fees or perhaps costs associated with moving home. Either way, a green mortgage might just be the best way to reduce your mortgage repayments and you should at least compare mortgage products today to make sure you’re getting the best deal.

About Green Mortgage Products

in Ireland

Green mortgage products are increasingly common in Ireland and currently available to buyers, movers and switchers at Bank of Ireland, AIB, EBS and Haven. While they offer clear financial benefits to borrowers, you might be asking yourself “what’s in it for the banks“? Well, quite a lot actually.

Green mortgages are good for public relations and great for the environment. This initiative puts the topic of sustainability in the mind of homeowners and aligns with climate change commitments in the Paris Agreement that pledge to increase the percentage of energy efficient buildings. But that’s not all because the ‘loan to value’ ratio is much more favourable for energy efficient buildings.

Studies show there is less risk involved for banks when it comes to borrowing against a green building. This is because green buildings are perceived to have more value over time than a building without a high BER rating and the borrower of an energy efficient building is also likely to be in a better financial position to make repayments in the future.

Simply put, green mortgages make sense for both parties and there is no apparent downside to the arrangement. However, the uptake on green mortgage products is still rather slow.

The Financial Benefit of ‘Going Green’ in Ireland

It’s true, some borrower’s are not yet convinced. In spite of the financial incentives, going green requires up-front investment and the sales pitch for green mortgage products is somewhat lacking. That is to say, the banks are still trying to figure out how to make the green renovation more attractive and to remove this sense of doubt by ‘normalising’ green mortgage products.

There is also the fact that many homeowners in Ireland have yet to consider switching to a better deal with an alternative mortgage provider. It’s possible to find these deals with a mortgage comparison tool but both the benefits and ease of switching mortgages is probably not as well-known as it could be.

It will take time for buyers and homeowners to catch on but borrower’s will eventually realise the financial benefit of a green mortgage and the savings one can make in the long term. After all, why pay more for your mortgage repayments when you can pay less? It’s an obvious way to save money.

Let’s examine a quick example to help illustrate these savings:

If you wish to borrow €250,000 over 30 years and have a 10% deposit, Bank of Ireland offers a fixed rate of 3% over a 5-year term which would bring the monthly repayment to €1,054. The green mortgage rate for this same amount is just 2.7% which would save you €40 per month for the duration of the loan. It might not seem like much at first but that equates to €2,400 over a 5-year term and all in the name of switching to a green mortgage product.

 

The above is just an example but you can compare offers on Switcheroo which features all of the green mortgage products currently available in Ireland.

Final Thoughts: Is a Green Mortgage Right for You?

If you can afford to renovate a green building or purchase a home with a high Building Energy Rating, you should consider switching to a green mortgage. Once again, it might not seem like a lot at first glance but these savings add up over time and certainly make a difference over the term of a mortgage.

At the same time, it’s important to compare other types of mortgage products because it’s sometimes possible to find a better non-green rate depending on the amount you borrow. You might also want a longer term than 10-years or the cash back which some people like to use to cover mortgage fees or perhaps costs associated with moving home. Either way, a green mortgage might just be the best way to reduce your mortgage repayments and you should at least compare mortgage products today to make sure you’re getting the best deal.

HAVE QUESTIONS

Read our FAQ

You're called Switcheroo.ie but do you help First Time Buyers and Home movers?

Yes, we absolutely do. As long as you are looking to buy a residential property we stand ready to help. We like the name Switcheroo as you are switching home if you are a mover and even if you are a buyer you are switching from tenant to homeowner!!!

What’s the best mortgage I can get?

That’s a question we hear a lot but there is no simple answer to this. There are a number of factors to this which both you and we need to consider when you are thinking of getting a mortgage.
Mortgages come with different terms and banks use different criteria to establish who they lend to, how much and at what rate. Don’t stress too much! You can find out pretty quickly to see if it’s worth your while. From there we will guide you through the process and make sure you get the right mortgage for you and make the process as simple as possible.

If I am a switcher how much can I save?

The Central Bank of Ireland published research that showed that many existing mortgage holders can save over €10,000 euros by switching their mortgage. It will depend on your specific circumstances but just 20 seconds on our calculator will show you what its worth for you to switcheroo.

What documents will you need from me?

Initially, none. The first step is for you to take our Financial Health Check in your secure customer portal. This will help us understand your circumstances and see if you are mortgage fit but we don’t need documentation at that stage. Only later when we move on to preparing your submission to a lender, will we need to make sure that your information is accurate, and we’ll need documentation from you then. Those include proof of your identity, income, utility bills with proof of address, as well as things like visa status where it applies. We’ll always make it clear exactly what we need and why.

Do you perform credit checks?

Our job is to make sure that you have the best possible chance of being accepted. So, we perform our own affordability check before sending anything to a lender. This leaves no footprint on your credit history.

I want to switcheroo, what’s next?

On our website there are calculators that will help you figure out what you can save or what your mortgage would cost. From there you’ll need to register into your customer portal so we can perform a Financial Health Check on you to assess what you can afford.

If all is well, we will then ask for more details on your current circumstances and the specifics of the house you want to mortgage.

Usually, this shouldn’t take more than 60 minutes, and you’ll be one step closer to a mortgage. At this point, you can have a phone call with one of our mortgage experts. They will answer any questions you have and tell you exactly what documents you’re going to need. From there, the expert team will guide you through the application process and keep you updated on progress. You can check progress online and we will keep you updated along the way.

What does Switcheroo.ie do with my data?

It’s all explained in our privacy policy, but basically: we won’t spam you and we won’t pass on your data to other companies so that they can spam you. We hate that.

How does Switcheroo.ie make money?

Yep, we don’t charge any commission. If you get a mortgage using Switcheroo.ie, the lender you use pays us a commission. Some intermediaries charge you an additional commission but not us, we are free forever. These commission never affect our advice. Our reputation and livelihood depend on us always giving our customers the best possible advice. The important bit is we’ll never charge you a penny.

HAVE QUESTIONS

Read our FAQ

You're called Switcheroo.ie but do you help First Time Buyers and Home movers?

Yes, we absolutely do. As long as you are looking to buy a residential property we stand ready to help. We like the name Switcheroo as you are switching home if you are a mover and even if you are a buyer you are switching from tenant to homeowner!!!

What’s the best mortgage I can get?

That’s a question we hear a lot but there is no simple answer to this. There are a number of factors to this which both you and we need to consider when you are thinking of getting a mortgage.
Mortgages come with different terms and banks use different criteria to establish who they lend to, how much and at what rate. Don’t stress too much! You can find out pretty quickly to see if it’s worth your while. From there we will guide you through the process and make sure you get the right mortgage for you and make the process as simple as possible.

If I am a switcher how much can I save?

The Central Bank of Ireland published research that showed that many existing mortgage holders can save over €10,000 euros by switching their mortgage. It will depend on your specific circumstances but just 20 seconds on our calculator will show you what its worth for you to switcheroo.

What documents will you need from me?

Initially, none. The first step is for you to take our Financial Health Check in your secure customer portal. This will help us understand your circumstances and see if you are mortgage fit but we don’t need documentation at that stage. Only later when we move on to preparing your submission to a lender, will we need to make sure that your information is accurate, and we’ll need documentation from you then. Those include proof of your identity, income, utility bills with proof of address, as well as things like visa status where it applies. We’ll always make it clear exactly what we need and why.

Do you perform credit checks?

Our job is to make sure that you have the best possible chance of being accepted. So, we perform our own affordability check before sending anything to a lender. This leaves no footprint on your credit history.

I want to switcheroo, what’s next?

On our website there are calculators that will help you figure out what you can save or what your mortgage would cost. From there you’ll need to register into your customer portal so we can perform a Financial Health Check on you to assess what you can afford.

If all is well, we will then ask for more details on your current circumstances and the specifics of the house you want to mortgage.

Usually, this shouldn’t take more than 60 minutes, and you’ll be one step closer to a mortgage. At this point, you can have a phone call with one of our mortgage experts. They will answer any questions you have and tell you exactly what documents you’re going to need. From there, the expert team will guide you through the application process and keep you updated on progress. You can check progress online and we will keep you updated along the way.

What does Switcheroo.ie do with my data?

It’s all explained in our privacy policy, but basically: we won’t spam you and we won’t pass on your data to other companies so that they can spam you. We hate that.

How does Switcheroo.ie make money?

Yep, we don’t charge any commission. If you get a mortgage using Switcheroo.ie, the lender you use pays us a commission. Some intermediaries charge you an additional commission but not us, we are free forever. These commission never affect our advice. Our reputation and livelihood depend on us always giving our customers the best possible advice. The important bit is we’ll never charge you a penny.

THE SWITCHEROO.IE DIGITAL MORTGAGE PLATFORM

We focus on great customer experience to
support you through your application

Don’t take our word for it, read what our customers think of us

THE SWITCHEROO.IE DIGITAL MORTGAGE PLATFORM

We focus on great customer experience to
support you through your application

Don’t take our word for it, read what our customers think of us

THE SWITCHEROO.IE DIGITAL MORTGAGE PLATFORM

We focus on great customer experience to support you through your application

Don’t take our word for it, read what our customers think of us

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With a Mortgage Expert

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Expert

Good news for First Time Buyers! Switcheroo Mortgages is now accepting mortgage applications for 4 times income.

Under the new central bank guidelines, first time buyers will be able to borrow up to 4 times their income from January onwards, but Switcheroo Mortgages is accepting applications from now.