Bank of Ireland launches new mortgage product with discounts based on energy ratings

At the moment banks offer green mortgages which are lower than traditional rates, but only for homes that have a Building Energy Rating (BER) of B3 or higher.

The new product comes a day after AIB and its subsidiaries EBS and Haven reduced rates on a number of green mortgage fixed rates.

Now Bank of Ireland is launching what it calls ‘EcoSaver Mortgage’, with discounted fixed rates for all properties with a Building Energy Rating (BER), from A to G.

EcoSaver Mortgage will be available to new customers and also to existing customers who move to the new product from another Bank of Ireland mortgage product, from Thursday, April 18.

Today's News in 90 seconds - 9th April 2024

A home with a BER that is assessed as G will get an 0.05 percentage point discount.

For homes with an F rating the discount will be 0.1 percentage points.

For E it is 0.15 points, and D is 0.2 points, while a home rated D gets a discount of 0.2 points.

C rated homes get a 0.25 percentage points discount with a reduction of 0.25 points for a C rating.

Homes with a B rating will get a 0.30 points discount on a fixed rate.

And homes on an A rating will get a fixed-rate discount of 0.35 percentage points.

Customers who take out an EcoSaver Mortgage will be rewarded for energy upgrades made to their property, with each BER improvement bringing a larger discount to the EcoSaver rate.

Bank of Ireland said customers can get an EcoSaver Mortgage once their existing fixed rate comes to an end.

Alternatively, they can break out of their current fixed rate and change to an EcoSaver Mortgage.

However, breaking out of a current fixed rate term may not provide a saving if the customer is already on a lower fixed rate than what is currently offered by Bank of Ireland. And there is likely to be a cost to end a fixed rate term early.

Non-fixed rate customers may elect to switch to Ecosaver Mortgage and get a fixed rate at any point, the bank said.

From 18 April also, Bank of Ireland’s standard variable rate for owner occupiers will be a single rate of 4.15pc.

This rate is in line with the lowest rate Bank of Ireland currently offers for any standard variable rate LTV mortgage and all new and existing customers.

Existing customers applying for the new rate can contact us or visit our website from 18th April. This rate will not be eligible for cashback.

Director of homebuying at Bank of Ireland Alan Hartley said: “The concept behind EcoSaver is simple – the more energy efficient your home becomes, the more your EcoSaver mortgage interest rate reduces.”

He said almost three quarters of the housing stock in Ireland is BER C and lower.

“Uniquely in the market, EcoSaver gives a range of tiered discounts for all properties with a BER, from A to G, a fairer situation for all homeowners.”

“Bank of Ireland is committed to almost halving the carbon emissions of our mortgage loan book by 2030. EcoSaver will help us on that journey and support the State’s National Retrofit Plan,” Mr Hartley said.

On Monday banks were accused of “discriminating” against mortgage customers by cutting green lending rates while leaving other rates untouched.

It comes after AIB and its subsidiaries EBS and Haven cut their green mortgage rates, but not other home-loan rates.

The gap that has opened up between a typical green rate from AIB Group and a non-green rate means borrowers are now paying an additional €3,400 a year if they do not qualify for a green rate.

Leading broker Michael Dowling said this was “unfair and discriminatory”.