Banks and credit unions are now starting to offer “green” mortgages, loans and lines of credit for people that are looking to be more eco friendly while benefiting financially. Though the Citizens Bank was the first Canadian bank to offer a green mortgage, many others have now stepped onto the bandwagon. For each green mortgage funded many of the lenders will make a contribution to an environmentally friendly fund.
If you are approved for a green mortgage you can expect to get a great rate with some added benefits. The mortgage usually comes with a line of credit at prime rate to be used for energy efficient upgrades and other energy or eco friendly coupons. Some banks are offering a green mortgage with a rate of 1% less than the prime rate or a cash rebate once you upgrade your home to be classified as “energy efficient”.
Since 2003 CMHC has offered a 10% refund on mortgage loan insurance premiums as an incentive to buy mortgage insurance to buy certified energy efficient homes or upgrade their current home to be more energy efficient. You also have the option of a longer amortization period of a maximum of 35 years (for no charge) which significantly reduces monthly mortgage payments. All homes must be certified under an energy efficient program or have an audit to prove that they are in fact energy efficient. Other green ideas to encourage people to buy energy efficient homes are surfacing across the country. In Ottawa, the Liberals are mulling over a “location-efficient mortgage”. This would let people buy homes near public transit and reap the benefits of a mortgage at a lower interest rate.
The Canada Green Building Council attributes 40% of Canada’s greenhouse gases to energy used by buildings. As more and more financial institutions are offering green products, hopefully it will help encourage Canadians to do their part to save the environment while benefiting from these changes. Buying or upgrading to an energy efficient home will not only be more environmentally friendly, but homeowners will cut costs on heating expenses in the future. The federal government estimates that a homeowner with an annual heating bill of $2000 will save $700 in energy costs by upgrading to a more energy efficient house. Although you will have to dish out money to install energy efficient appliances or materials, the resale value of your home will increase.
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