Bank of Ireland reworks green mortgages to offer discounts down to energy rating G

Bank of Ireland has moved to rework its fixed-rate green mortgage range to offer customers discounts for homes with energy-efficiency ratings of A right down to G.

The new so-called EcoSaver mortgage will replace the bank’s current green mortgage offering effective from April 18th for new business or existing customers who move to the new product from another one with the bank, it said in a statement on Tuesday.

Customers with a home carrying a Building Energy Rating (Ber) of A would qualify for a 0.35 percentage point discount against the prevailing fixed-rate price for their loan product. The discount narrows to 0.3 points for B-rated homes, right down to 0.05 points for G-rated properties.

The prevailing five-year fixed rates for owner-occupied properties with a loan of less than 80 per cent of a building’s value are, for example, 4.15 per cent for exiting customers and 4.75 per cent for new mortgage applicants.

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“The more energy-efficient your home becomes, the more your EcoSaver mortgage interest rate reduces. Almost three-quarters of the housing stock in Ireland is Ber C and lower,” said Alan Hartley, director of homebuying at Bank of Ireland.

The bank said its research shows that six in 10 homeowners plan to retrofit their home at some stage in the future – while one in 10 already has.

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The move comes a day after AIB moved to take a greater slice of green mortgage activity by cutting rates on its fixed-rate products by 0.2 of a percentage point to a market-leading low.

The increased focus on climate-friendly lending comes as the global banking sector faces growing pressure from regulators and certain cohorts of investors to improve their sustainability.

Bank of Ireland aims to grow so-called sustainability-related lending on its balance sheet to €30 billion by the end of the decade, from €8 billion in 2022.

“Savings made through EcoSaver rates will contribute to the cost of retrofitting a home, so our customers can save money and improve their homes,” said Aine McCleary, chief customer officer with Bank of Ireland.

“And for customers who aren’t currently in a position to invest in their homes, they can still benefit from an EcoSaver discount if they have any Ber.”

There are a number of ways in which existing customers can get an EcoSaver mortgage. Fixed-rate customers can wait until their current fixed rate expires, and move at that point, or they can break out of their current fixed rate and change.

However, breaking out of a current fixed rate term may not provide a saving if the customer is already on a lower fixed rate than what is currently offered by Bank of Ireland.

There may also be a cost to end a fixed rate term early, the bank said. Non-fixed-rate customers may elect to switch to and get a fixed rate at any point.

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