Green mortgages

S

settlement

Registered User
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Hi all,
As a prospective FTB looked with envy at the very low mortgage rates for those with green energy ratings. at

However, I have realised that it's somewhat straightforward to simply get any mortgage, buy your house, then simply renovate to get your green rating and new mortgage.
Yes I understand cash is required etc. For those who can manage this, isn't this the extremely obvious move that will pay off big in the long run? Or would that extra, say 10k for renovation, be much better put into the deposit? I very much doubt it but I'm no maths whiz. It seems that you'd make it back in a few short years and benefit over the long run

EDIT: not to mention all the tax incentives for improving home energy rating. surely a massive win win
 
Exactly why I bought a home that has poor energy rating right now, but extremely good value otherwise, brilliant location and lovely house aside from being, well, cold. Fixed mortgage for 5 years with a view to going the one stop shop SEAI route. Would expect that to get it to a B2 if not better.
10k would be pretty ambitious though - I expect to pay up to 30k towards energy improvements (after OSS grants), and then another 20-30k on kitchen and bathroom remodelling. That sounds like a lot, but houses like mine in this location would generally go for at least 40k more if meeting C2-B3 energy ratings. I expect to stay there for life, so feel it will pay for itself over 20-30 years.

Now that said it was by far the cheapest priced 2 bedroom house in PPR for the area in about 10 months. A better rated home could be had for about 20-30k more, but in less prime locations. Kind of up to yourself - you would need to be paying less than market price for this to ultimately work out, or like me, getting a less efficient house but in a far better area at a good price.
 
You don't mention the age of the property. Honestly, the SEAI schemes are just inflating the cost of doing anything, but they are particularly poor in relation to older buildings and causing many brave survivors to be horribly mutilated for "greenery". If you are looking at anything pre 1947, don't go this route. It can be done but it costs a lot and is much better approached "slow and shallow", not deep retrofit, without grants.
 
Interesting thoughts. Something else I didn't factor in was that apparently remortgaging is like getting a mortgage all over again, same level of paperwork etc
 
settlement said:
Or would that extra, say 10k for renovation, be much better put into the deposit? I very much doubt it but I'm no maths whiz. It seems that you'd make it back in a few short years and benefit over the long run
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You should very much doubt it. It's very unlikely that a €10k upgrade would be meaningful enough to get anything up into B ratings. But realistically, the market rate for 2 identical properties (if they existed) for a B2 vs C1 is unlikely to be discounted at all, particularly with how the current market is.

The best mortgage rates are not exclusively green mortgages so really you shouldn't let this sway your decision. You should decide your budget and location first and see what you can afford. If the house needs work then you need to factor this in to your purchase price. If it eventually gets upgraded, it is a nice perk to reduce the mortgage rate but it is unlikely to make it back as you've suggested.

Even from a more practical perspective, all rates are currently on the rise so even if you fixed today at a non green rate, there is a good chance that the equivalent green rate could be higher by the time you get around to completing the work so you would be better off not refixing or switching

The key thing being you stick to an affordable budget overall and choose the best mortgage rate applicable today. If you upgrade, then reassess the mortgage rates

settlement said:
Interesting thoughts. Something else I didn't factor in was that apparently remortgaging is like getting a mortgage all over again, same level of paperwork etc
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It depends, if changing mortgage product with your existing lender, it is usually a simple 1-pager plus evidence of the new BER cert

If changing lender, then yes it is the full paperwork needed again
 
very helpful, thanks
 
Depends also what you are doing. If you buy a 50 year old house with electric heating but otherwise decent insulation (walls pumped/dry lining and 300mm attic insulation, double glazing), the BER rating will be massively depressed just by the heating system. The surveyor can tell you if there is dry lining and you can see the attic insulation level yourself. Obviously a much older house with no insulation at all is going to cost more than a house built between 1968 and 1998 with moderate insulation but poor heating. But yes, you are still talking about more than 10k, obviously.
 
If you buy a house which doesn't qualify for a "green" rate now but subsequently upgrade to the required B3 BER standard, can you go back to your existing lender and ask them for the green rate (assuming they offer them) without switching lenders?
 
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