It seems like everyone is jumping on the environmental bandwagon these day, and it's a smart move, as most people believe the Government and large businesses are not doing enough to protect our planet or slow the depletion of natural resources.
So positioning your business as a friend of environmentalism is a great way of building brand loyalty among consumers who are less loyal to brands and companies than ever before.
So perhaps it was only a mater of time before the banking sector got in on the Green Wave that's spreading throughout Ireland by offering "green" loans, which Bank of Ireland has announced today.
Bank of Ireland has unveiled a suite of "green" loans and interest rates to encourage and reward home owners and businesses to be more energy efficient.
From today the bank will offer discounted mortgage rates to customers who are looking to buy a home that has an A energy rating. It will also offer discounted loan rates to those looking to upgrade the energy rating of their existing property and for businesses planning on implementing energy-saving initiatives.
This is all part of the Bank’s Sustainable Finance Fund will make €1 billion of green loans available over the coming year.
Green Mortgage Interest Rate: Borrowers can receive a discount of 0.20% off any of BOI’s fixed-rate mortgages (from 1 to 10 years). The discount will be available to first-time buyers, movers, and those building their own home where the home they're buying or building has an A BER energy rating. The discount will also be available to those renovating a residential building in order to achieve an A energy rating.
Savings: Based on a 20-year €200,000 mortgage fixed for the first five years, the Green Mortgage Interest Rate would represent a saving of around €2,085 over the five-year term.
Green Home Improvement Loan: The Sustainable Finance Fund will also offer a Green Home Improvement Loan at 6.50% (Variable APR) for amounts from €2,000 to €65,000. This loan is designed for those who want to retrofit their home with items that will help reduce energy consumption, like solar panels or insulation.
Savings: Based on a €15,000 loan, this discount would represent a saving of around €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 0.50% 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.
Savings: Based on a €300,000 loan at the Small Business Rate, this discount would represent a saving of around €5,925 over a seven-year period.
These "green" loans are an interesting development and anything that lowers mortgage rates here, which are the second highest in the Eurozone, is to be welcomed.
However very few homes, apart from new builds, come close to being A-rated and many of the new builds that are A rated are unaffordable for first-time buyers, particularly in Dublin. As such, these discounted "green" mortgages may end up being the preserve of the wealthy.
The green home improvement loan is a worthy initiative and should hopefully encourage more people to consider investing in things like solar panels and wall insulation, which will reduce their energy demand around the home - and their bills.
However at 6.5%, the rate is not quite the cheapest on the market. Which brings us on to our next point...
Before you apply for any financial product it's imperative that you shop around. So before you pull the trigger on any deal, make sure you can't get a better one elsewhere.
Is this just a ploy to appear more 'woke'? Or is this legitimately good news for the environment? Get in touch and let us know!
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