Green Homes and Green Mortgages

As we all spend more time in our homes than planned and desire, it is worth looking towards new models of doing things better from the building industry, the finance industry, and all of the other participants involved in building our homes. Some may have seen greater mention of terms such as “Green Finance” or “Green Mortgages” that have piqued the interest of business and starting to reach citizens looking to buy a home or improve their current home. What are these programs and what are the benefits of Green Mortgages and the Green Homes they finance?

A “green” (or “sustainable”) home is a home designed and constructed to minimize the current and future environmental impact of its existence. Fortunately, there are many financial benefits to those who may borrow to purchase the home that coincide with less risk to the bank lending money for that home that allows a bank to lower the cost of finance through a reduced interest rate offered through a “green” mortgage. Determining which homes have followed the necessary criteria is a complex process but expert organizations exist that independently certify the “greenness” of a home to assure the homebuyer and the bank the promised benefits will arrive.

More specifically, those benefits for the

• HOMEBUYER and HOMEOWNER

Reduced energy costs and less frequent repairs; Significantly reduced monthly energy costs and less frequent (and expensive) repairs associated with Green Homes means the families in those homes pays a lower “total cost of monthly ownership” than non-Green Homes.   Just like owning a car, it is not only the monthly car payment but the fuel and maintenance that dictates the true monthly cost of owning that car. The same is true for a homeowner who must pay their mortgage payment, the energy bill, and any needed repairs to keep the house comfortable throughout the seasons and to avoid the myriad of problems that arise in a home; particularly one poorly built.

Healthier Homes; Greener homes are also healthier, more comfortable homes for the families that live in them. Using non-toxic building materials – particularly for the interior finishing – eliminate harmful exposure to the many chemicals used in standard construction. Just one example, while there are many causes, asthma and other respiratory ailments are known to be triggered by toxic paints, adhesives, wallboards, etc. This is not only an unacceptable health risk for family members, but has costs ranging from hospital visits to missed work or school that disrupt lives and imperil family finances.

• BANKS & MORTGAGE PROVIDERS

Borrowers have more money; Their borrowers who choose to finance a Green Home have more money in their pocket each month from the savings mentioned above to pay the monthly mortgage payment.

Better quality construction; The better quality of construction means the home will maintain a higher value over time. Both these factors reduce the “mortgage default risk” – or the risk a buyer cannot repay the bank’s loan – which allows the bank to reduce their cost of financing. The homebuyer can then borrow the small additional costs to get the green performance while having a reduced mortgage payment relative to non-Green Homes.

• COMPANIES involved in RESIDENTIAL PROJECTS from investors and developers to building materials manufacturers, architects, engineers and other practitioners

Superior Quality Homes; The “Green” certification of the home sends a strong signal to potential buyers that the home will deliver the benefits of quality and lower costs.  Green Homes certifications are rapidly becoming the best indicator to the market and aspiring homeowners that the home they are considering has met stringent requirements. The discounted financing made available through “Green Mortgages” enables project developers to invest more in essential design and construction budgets while reducing the cost of ownership for their clients.

• OUR PLANET Lastly, and to some, most importantly, homes that require less fossil fuel energy to build and operate obviously help us avoid the worst scenarios for planetary climate change. But beyond this, Green Homes avoid damaging and help repair our fragile ecosystem in many ways. Choosing building materials that have significantly reduced or eliminated their negative environmental helps our forests, and waterways. Choosing beautiful landscaping that is native to your region means your plants survive and thrive with less or no pesticides, fertilizers and watering. This is a tremendous help to local ecosystems – from the bees necessary for a healthy food supply to keeping our water free of toxic chemicals.

On behalf of our SMARTER Finance for Families consortium, we invite you to learn more about this exciting topic and to follow our developments here as we work together to bring more and more Green Homes to the citizens of Europe, innovate with the building and finance industry to help deliver those homes, and improve the health of our planet for today’s and future generations.