Green mortgages arrive at the showcase of the large Spanish banks

The growing awareness of customers to climate change – and of the entities themselves within their corporate social responsibility obligations – is reaching the most universal banking offer, mortgages. More and more Spanish banks are joining the trend of green mortgages, a phenomenon still a minority but to which large entities are joining, first in the granting of loans to developers with a bonus if they are sustainable and more recently, to private customers.

Now buying a ‘green’ home or reforming it by equipping it with eco-technologies to save on water, electricity and gas can make the mortgage cheaper and allow a loan with more favorable conditions, with a reduction of between 10 and 20 basis points.

Currently, buildings generate 36% of CO2 emissions and 40% of energy consumption in the European Union. Improving the energy efficiency of housing contributes not only to the fight against climate change, but also to the savings of the user so that he faces his bills and obtains a cheaper loan. On the other hand, banks also earn, since this energy efficiency reduces the risk of default by the owners and increases the value of the property. “The interest is based on the risk of not paying and in green mortgages there is less risk,” says Lucía Veiga, director of Communication at the mortgage headquarters of iAhorro.

Implementation in Spain

In our country, this type of ‘eco-friendly’ mortgages arrives somewhat late compared to the rest of Europe. The first time the basic procedure for the certification of the energy efficiency of buildings in Spain was approved was following a Royal Decree in April 2013, but green mortgages have not been named in a legislative text until a month ago with the new Mortgage Law, where they are only mentioned.

“The market is at a very early stage and the supply is still quite small,” says Veiga. “The ecological mortgage can give rise to improve the conditions but in the middle of the negotiation there may be another factor in the characteristics of the client that manages to improve the mortgage much more than buying an ecological house,” he says.

Mortgages for customers

Triodos Bank, a pioneer in the commercialization of these ‘green’ mortgages in Spain, values CO2, consumption and energy certification of homes and depending on what those three scales are, the differential drops more or less. “During the six years that this product has been in existence, we have signed more than 1,600 green mortgages in Spain,” says Gemma Balasch, head of Triodos Mortgage.

Likewise, Caja Rural de Navarra and the Union of Real Estate Credits (UCI) offer a bonus of up to 10 points to customers who are going to buy homes with A or B certification. In fact, last year these two entities together with Triodos Bank started the EeMAP plan on mortgages for energy efficiency whose initiative is “to create a standardized energy efficiency mortgage at European level” as its official website says.

This June, Santander Bank announced its green mortgage proposal in which those mortgaged homes with energy ratings A or A + will have a maximum bonus of 10 basis points on the base rate. CaixaBank and Bankinter are studying the launch of their own green mortgages.

For promoters

In the summer of 2018, Bankia launched a sustainable loan that subsidizes the price of loans to finance real estate developments with an environmental sustainability certificate. This time, the interest applied will depend on the credit quality of the promoter company, with a bonus ranging between 0.10 and 0.20 points. During the first year of the product’s life, nine operations in total have been formalized.

In addition, and already for the private client, the European Investment Bank has recently granted a loan of 150 million to Bankia, which adds another 150 million, to create a line of green mortgages. Those who want to acquire these homes with almost zero energy consumption will be able to obtain a reduction of up to 0.25% on the final rate.

Last July, BBVA launched a line of loans for the promotion of energy-efficient homes, offering customers a bonus on their spread. The only condition is to accredit a minimum energy certification. “10 operations have already been signed for 482 homes and in our portfolio we have another 13 projects for another 856 homes,” says Paloma Puente, director of Real Estate BBVA.

Sustainable energy certifications

Official documents. Energy certificates, issued by the Autonomous Communities, qualify a property energetically. But, there are private companies that issue certificates focusing on sustainability, well-being and energy efficiency.

BREEAM. With 20 years of experience, this British label is the world leader and rates the building after evaluating 10 categories: Management, health and well-being, energy, transport, water, materials, soil, waste, pollution and innovation.

GREEN. In a very similar way, this Spanish tool evaluates the environmental sustainability of homes through 12 criteria such as location, indoor environmental quality or the management of their resources.

LEED. This American seal certifies how sustainable a building is through nine categories (energy efficiency, water consumption, materials …) but, unlike the others, it is based on a sum of points instead of a weighting.

Passivhaus. Of German origin, this is the only certification that only focuses on “the optimization of existing resources through passive techniques” such as thermal insulation, air tightness or ventilation.

Source: Five Days