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. The new initiatives include a green interest rate discount for borrowers buying or building energy-efficient homes, and a green home improvement loan for energy-efficiency retrofits for older properties. Businesses, including farmers, will also benefit from reduced rates for investment in energy-saving improvements.
They are part of the Bank’s Sustainable Finance Fund which will make €1 billion of green loans and discounts available over the coming year. This supports the Government’s Climate Action Plan and Ireland’s commitment to the United Nations Sustainable Development Goals. According to the Sustainable Energy Authority of Ireland (SEAI), over 1 million homes in Ireland need investment to make them energy efficient. Additionally, Irish SMEs spend more than €2 billion annually on energy, which could be reduced by 10% through greater energy efficiency.
The loans and discounts launched will support more sustainable energy use in Irish homes and businesses, and include:
Green Mortgage Interest Rate: Borrowers can receive a discount of 0.2% off any of Bank of Ireland’s fixed interest rate options (from 1 to 10 years) where a fixed term is selected at drawdown of the mortgage. This fixed rate discount will be available from drawdown on new borrowing to finance the purchase, construction, or renovation of residential buildings with an A-rated or to achieve an A-rated BER energy performance. Based on a 20-year €200,000 mortgage fixed for the first five years, the Green Mortgage Interest Rate would represent a saving of c. €2,085 over the five-year term.
Green Home Improvement Loan: The Sustainable Finance Fund will also offer a Green Home Improvement Loan at 6.5% (Variable APR) for amounts from €2,000 to €65,000. Designed to fund energy-efficiency upgrades – for example installing solar panels and retrofitting insulation – the Green Home Improvement Loan offers a discount on current rates from 0.3% to 2% (depending on loan amount). Based on a €15,000 loan, this discount would represent a saving of c. €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 0.5% 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. Based on a €300,000 loan at the Small Business Rate, this discount would represent a saving of c. €5,925 over a 7-year period.
Commenting on the launch of the Bank of Ireland Sustainable Finance Fund, Gavin Kelly, CEO Retail Ireland at Bank of Ireland said:
“Everyone has a part to play in addressing one of the most important issues of our time – climate change. Addressing this challenge means changing behaviour, and as a leading financial services provider in Ireland we can make a meaningful contribution to incentivising that change.
The Sustainable Finance Fund and the first of its new products announced today are designed to practically support our customers’ transition to a more energy efficient and sustainable future.
At Bank of Ireland, we want to play our part in Ireland’s response to this issue.”
The fund and products complement the Bank’s steps to reduce its energy consumption and ongoing support of the renewable sector. Bank of Ireland has committed to reduce its carbon emissions intensity by 50% by 2030 as part of the Low Carbon Pledge. The Bank is also a leading lender to the renewable energy sector financing wind projects which provide the equivalent of c. 450,000 homes with green energy.