Banks have been accused of ‘discriminating’ against mortgage customers for 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”.

Green mortgage rates are lower and are available for properties with a Building Energy Rating (BER) of B3 or higher.

AIB and its subsidiaries EBS and Haven have cut their green mortgage rates by 0.2 percentage points. The new rates are available to both new and existing customers.

The lender said the reductions will mean its three brands will offer the lowest green mortgage rates in Ireland.

The AIB Green five-year fixed rate, for a loan-to-value (LTV) ratio of less than 50pc, goes from 3.65pc to 3.45pc. The same fixed rate for those with an LTV of 80pc to 90pc goes from 3.85pc to 3.65pc.

The EBS Green four-year rate goes from 3.75pc to 3.55pc, and the Haven four-year rate goes from 3.65pc to 3.45pc.

These rates are also available to customers who have a mortgage loan with AIB Group if their home has a BER ­rating between A1 and B3 and there are more than five years left on the loan.

Customers taking up the new lower rate can save around €387 annually with a green mortgage, AIB said.

According to the Sustainable ­Energy Authority of Ireland (SEAI), in the first half of last year, more than 19,000 upgrades were completed. AIB said people who have retrofitted their home may also qualify for a green mortgage.

Mr Dowling, of Dowling Financial in Dublin, said it was unfair that first-time buyers who were unable to secure a newly built home were being hit with much higher mortgage rates when they buy a second-hand home.

“I am concerned with that, the gap between ‘green’ and ‘non-green’ rates is increasing. This is an unfair process and discriminates against first-time buyers and second-time buyers that are not buying a new home or a home with a high BER,” he said.

He gave an example of a first-time buyer couple, borrowing €300,000 over a 35-year term. This couple has a 90pc loan-to-value ratio. If they qualify for a five-year green fixed rate from AIB, the rate will be 3.65pc. This will mean monthly repayments will be €1,231, Mr Dowling said.

But if the borrowers do not qualify for a green rate, they will be charged 5pc for a five-year fixed-rate mortgage by AIB. Monthly repayments will be €1,514.

“The difference is €283 per month, or € 3,396 per annum, or €118,860 over the term of the mortgage,” Mr Dowling said.

Last year, first-time buyers who took out mortgages bought 16,985 ­second-hand home and 8,606 new homes, he said.

Therefore, AIB Group, Bank of Ireland and PTSB, which offer similar discounts for green mortgages, will earn substantially more interest on the buyers of second-hand home customers.

“In my opinion, it is a cynical exercise to boost profits hiding behind the ‘green’ agenda,” Mr Dowling said.

Meanwhile, a study from the Central Bank found that borrowers who locked into good-value fixed rates as the European Central Bank (ECB) was hiking its interest charges saved an average of €2,000 a year from the move.