What green mortgages are and how they work

Today, global warming is being tackled from every possible angle. The financial and real estate sector has developed products such as green mortgages, which are committed to sustainability and ecology.


7 April 2022 |

Today, global warming is being tackled from every possible angle. The financial and real estate sector has developed products such as green mortgages, which are committed to sustainability and ecology.

It is true that, although they have not yet made a big impact in the Spanish market, they are a great help if, for example, you want to buy a luxury flat in Barcelona and make it comply with energy efficiency standards.

Let’s take a closer look at what green mortgages are and how they work.


What is a green mortgage?

Like a traditional mortgage, it is a financial loan. The difference is that green mortgages are specially designed for the construction, acquisition, or rehabilitation of a sustainable home.

According to data from the Ministry for Ecological Transition and the Demographic Challenge, buildings represent a 40% of final energy consumption in the European Union, as the vast majority of them were built in the 1950s, before energy efficiency regulations for housing were in force.

For this reason, this financial alternative is committed to ecology and sustainability, and is accommodating to eco-friendly home renovation or construction projects, as it entails interest reductions and lower risk.


The benefits it offers

  • Low interest rate

Banks that offer green mortgage credit often reward the social sensitivity of their customers by making the mortgage interest rate lower. In other words, the more efficient a home is, the lower the mortgage interest rate can be.

  • Energy saving

Although it is a loan, it can also translate into long-term savings. Homes with A+ energy certification consume less energy, which means a reduction in costs (between 3,000 and 4,000 euros per year).

  • Lower risk

The risk profiles for this type of credit are low. This is due to the fact that, as it is a loan with a reduced interest rate, the instalments to be paid are usually lower.

  • Revaluation of the property

Buying or rehabilitating a property to improve its energy efficiency levels is not only an investment that helps to reduce the impact on the environment, but also means the possibility of selling it at a profit in the future. The real estate market is increasingly focusing on sustainable housing and, in short, it is a smart investment.


Main banks that offer them in Spain

Below is a list of the banks that currently offer this type of product:

Banco Nombre
Triodos Bank Sustainable Mortgages
Liberbank Oxygen Mortgage
Banco Santander Sustainable home mortgages
BBVA Efficient Home Mortgage
Cajamar Green Mortgage
Mediolanum Freedom Green Mortgage
Bankinter Hipoteca joven casa eficiente


Examples of banks offering green mortgages

Triodos Bank is one of the banks in charge of coordinating the implementation of the EeMap Project, a pilot project for green mortgages that started in 2018 with standardised conditions across Europe and is still progressing.

In addition to being a certified B Corp company, they are the leaders in green lending as they link the interest rates of their mortgages to the energy rating of the home. In other words, the better the energy rating of the property, the lower the interest rate they charge.

Who is eligible?

Basically, anyone who meets the requirements can apply for a green mortgage loan. These are:

  • The property has an energy certificate type A or A+. In the case of applying for a loan for a renovation, it must be guaranteed that the construction allows reaching these levels of energy efficiency.
  • As with any other financing, it is necessary to demonstrate sufficient solvency to repay the loan.
  • National Identity Card (DNI).
  • Last income tax return.
  • Salary and credit history.


And why do we recommend a green mortgage?

As we have mentioned before, investing in green mortgages guarantees lower energy bills, thanks to the efficiency of the supplies and the better insulation that can be installed in the house.

From Withfor, luxury real estate Barcelona, we are committed to sustainability. We are convinced that this is a way in which we can contribute to a reduction in the environmental impact, reduce pollution and promote a more sustainable future.

In fact, many people think that green mortgages are associated exclusively with luxury or high-end housing and, on the contrary, this is not always the case.

The saving that is generated at energetic level, can compensate the price of the property and, above all, demonstrates a bet for a sustainable life being responsible with the environment.

Remember that in Withfor, we are always at your disposal for any management you need, whether you are looking for information about luxury rentals in Barcelona or any other subject, contact us without any obligation! We are here to help you.

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