What they are, what they are for and how green mortgages work

The green mortgage is a loan that aims to support building renovation interventions that make our homes more efficient and improve the energy class. For several years, European ecological awareness has been awakened, and even more so with the latest green directive; these products will therefore become increasingly important for consumers. But what is a green mortgage in concrete terms? 

A “green mortgage” or “green mortgage” it is a mortgage that allows you to finance the purchase of an energy sustainable house (with energy class A or B) or the renovation of a building that allows it to achieve greater energy efficiency and a lower environmental impact.

The Energy efficient mortgage (Eem), according to the European definition, they are of three types:

Green mortgages for home purchases

They are green mortgages that finance the purchase of a home with high energy performance (class A or B). They can have a fixed or variable rate, with subsidized rates, and can finance between 80 and 100 percent of the value of the property.

Green mortgages for home renovations

They are loans granted to carry out energy improvement interventions on the first home, such as thermal insulation, clean energy supply, efficient air conditioning systems. The aim is to achieve an improvement in energy performance of at least 30 percent, or a step up by two energy classes towards the best.

Green mortgages to build a house

These are loans granted to finance the construction of a house according to green building criteria, i.e. a building with low or no environmental impact. The disbursement of the loan takes place in several tranches depending on the progress of the work and covers up to 90 percent of the costs incurred.

What documents are needed to obtain a green mortgage?

To obtain a green mortgage, the following documentation must be presented to the bank:

• identity card
• Tax ID code
• income documentation
• documents relating to the interventions in question and the characteristics in terms of improving energy performance
• documents relating to the property: if purchased, it must be a class A or B property; if renovated, it is necessary to present an estimate of the interventions to be carried out for the jump of two energy classes; if to be built, documentation certifying the green building characteristics of the house is required. 

What are the advantages of green mortgages?

The advantage of a green mortgage is that, in addition to being good for the environment, it can usually be obtained at lower interest rates than traditional mortgages. For this type of use, in fact, you can access specially designed banking offers.

In fact, we must keep in mind that a house with good energy efficiency (A or B) is reevaluated over time, therefore a greater profit can be obtained both from its sale and from its rental. This is one of the reasons why banks grant favorable conditions, which constitutes a double advantage for the borrower who, with lower interest, finds himself with a house of greater value. Furthermore, with greater energy efficiency, even the consumption on the bill will be lower, and this will also be a further advantage for the homeowner.

What are the requirements for obtaining a green mortgage?

The requirements for accessing a green mortgage may differ from bank to bank, but what is essential is, obviously, the building that is purchased or renovated. By obtaining a mortgage, in fact, it is necessary for the property to be (or become) more energy efficient. In other words, the property underlying the mortgage, if purchased, must be in energy class A or B, while in the case of restructuring, it must do improve energy efficiency by at least 30 percent, or with a "leap" of at least two energy classes.

Is a green mortgage or a traditional mortgage better?

What to choose between a green mortgage and a traditional mortgage? Before deciding it is necessary to compare the best offers; only in this way can we find the most suitable products for the specific needs and circumstances of each consumer and at any time. The interest rate situation could in fact make a traditional mortgage convenient. On the other hand, obtaining a mortgage specifically aimed at improving the energy efficiency of a home could make it easier to access a bank's specific offer.

Green house: tax breaks

The tax breaks to make a house 'green', i.e. more environmentally friendly and energy efficient, consist of the following bonuses:

Green house bonus

The green house bonus allows the deduction of 50 percent of VAT from the purchase of a house in energy class A or B by 31 December 2023. The 50 percent deduction of VAT from Irpef can be spread over ten years.

Ecobonus

Irpef deduction of up to 75 percent of expenses incurred for energy requalification interventions until December 2024.

Super bonus

Tax deductions for cumulative renovation and energy efficiency interventions reduced from 2023 to 90 percent according to the new Government regulations.

How to make a house eco-sustainable?

What are the interventions that can be financed with a mortgage that make a home more eco-sustainable, particularly from the point of view of energy consumption? Energy consumption is fundamental to the environmental impact: the higher the efficiency, the lower the impact. Here are some renovation interventions that can improve energy efficiency and which can be financed with a green mortgage (but also with renovation bonuses or with the superbonus 110):

• Install fixtures that improve insulation. Windows are one of the main points of heat loss in a house, which implies greater energy consumption in air conditioning. Installing double or triple glazed windows prevents this, reducing the energy we have to use to air condition the home. 
• Improve wall insulation. In addition to windows, walls, floors and ceilings are also spaces through which heat is lost. Installing some siding made of low thermal conductivity materials helps avoid this problem.
• Improve the insulation of external walls. Just as we can improve insulation inside, we can do it outside. In this case, the most common way is to install materials with low thermal conductivity on the roof and facade.
• Install solar panels. Having solar panels on a home allows us to generate our own energy, which obviously reduces the impact the home has on the environment and its dependence on the supply of electricity (which is generally produced by burning fossil fuels).
• Installation of charging stations for electric vehicles. The decarbonisation of transport also plays an important role in the ecological transition; Having a charging station for an electric vehicle for private use is another intervention that helps us reduce the environmental impact of our home.
• Renovation of the electrical system. In addition to being dangerous, an old electrical system consumes more energy than a new one. Therefore, renovating it will help us have a more sustainable home.
• Heating your home with electricity. Replacing oil or gas boilers with electric boilers and other additional installations (e.g. underfloor heating) is an intervention that helps improve the energy efficiency of a home.