Lots of things can affect the interest rate you pay on your mortgage: your deposit amount, the state of the economy, your credit score. Now, there’s a new factor for Dutch homebuyers: what your home is made of.
This month Triodos, a Netherlands-headquartered bank, launched what it calls a “bio-based mortgage.” Customers who buy or build homes made from natural materials like wood, flax, straw, and even fungi will pay lower interest rates than those who use other materials. The aim, Triodos says, is to stimulate the use of those plant-based substances in construction because they produce fewer greenhouse gas emissions than conventional steel, concrete, and cement.
This isn’t the first time a bank has tied interest rates to the environmental performance of buildings. In recent years, as the fight against climate change has gathered pace and banks have sought to bolster green credentials, the market for energy efficiency mortgages has expanded rapidly. These so-called “green mortgages” charge lower interest rates for homes that need less energy to run because they are well insulated or use technology to control energy use. The logic is two-fold: First, homeowners who pay less for energy will have more money to pay their mortgages, and are therefore a safer bet for banks. Second, offering cheaper mortgages for more energy efficient homes makes them more desirable and encourages developers to build them, which generates housing stock that produces fewer greenhouse gas emissions.
Since the 1990s, state and local governments in the U.S. have also facilitated a series of energy efficient mortgage programs, in which homebuyers can borrow extra money to cover the cost of energy efficiency retrofits. In the Netherlands, Triodos offered the country’s first energy efficiency mortgage in 2012, and in 2020 the bank stopped offering …read more
Source:: Time – World