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At a time when sustainability is at the center of numerous discussions, green mortgages are one of the most valid proposals in the real estate sector in terms of respect for the environment
The idea of transforming commercial buildings, public buildings and homes into energy plants is intriguing and futuristic, like all the thinking of Jeremy Rifkin – the American economist and sociologist who was the first to talk about the redevelopment of the building stock.
His theories fit perfectly with the new scenario of the real estate sector which is increasingly inclined to reduce land consumption for new buildings and to improve the energy class of existing ones.
Where do green mortgages fit into this scenario and what exactly are they? We at Casavo will explain it to you in this in-depth article.
What is a green mortgage and how does it work
Green mortgages – in English Energy Efficient Mortgage (EEM) – are subsidized loans intended to improve the energy efficiency of a property.
Essentially, mortgages of this type are issued to purchase or build highly energy-efficient properties or to improve the performance of an existing building.
Buying a house with a green mortgage
Buying a house with a green mortgage is possible if the home belongs to the class A or B on the energy efficiency scale. In this case, the loan benefits from special favorable conditions such as, for example, the reduction of the interest rates applied.
Both fixed-rate and variable-rate, green mortgages provide repayment plans of different durations, and can cover from 80% up to 100% of the value of the property.
Green mortgage for renovations
When it comes to renovations, "green" loans are granted to cover all, or almost all, of the expenses related to the work necessary to improve the energy class of a property by at least 30%. property.
Green mortgage for green building constructions
Green financing can also be obtained for the purchase of green building constructions by presenting the appropriate certifications necessary to attest to the eco-sustainability of the property.
This type of mortgage is disbursed over the progress of the work, that is, in several installments spaced out over time, and covers 70% to 90% of the value of the building.
To obtain a green mortgage, in addition to the traditional documentation to be presented to banks for a normal mortgage application, it is also necessary to attach the certifications attesting to the eco-compatibility of the property or the cost estimate for the work to be carried out.
Why choose a green mortgage in 2021
Green mortgages are not only a good way to help the environment: they also have numerous advantages for those who request them.
To begin with, they offer more advantageous interest rates and significant tax deductions, allowing for substantial savings on the installment.
Furthermore, the Government has also decided to support sustainable construction by extending the ecobonus and establishing the superbonus 110, which brings the deduction rate to 110% for expenses incurred up to June 30, 2022 for all interventions carried out in the following areas:
- energy efficiency
- anti-seismic interventions
- installation of photovoltaic systems
- construction of infrastructures for charging electric vehicles.
Another aspect that makes the green mortgage interesting is linked to the fact that investing in redevelopment projects – in addition to lowering the monthly payment, increasing the value of the property and generating significant savings on the bill – reduces the risk of loan-related defaults precisely because borrowers are less burdened by expenses.
The European green mortgage, therefore, is an ambitious project, in which it is worth investing resources and research to satisfy all the parties involved in the process: the banks that lend the money, the owners of the properties but, above all, real estate agents like you who will be able to offer a valuable tool to potential clients about to purchase a property.
If you want to stay up to date with the latest news from the real estate world, learn about the new opportunities and technologies that the sector offers and collaborate with a company in line with market trends.