Are green mortgages starting to take off?
While Canadians are interested in reducing their impact on the environment, the decision to buy a "green home" is really being driven by saving cash, according to a recent survey.
Despite saying all the right things, more than 59 per cent of respondents cite financial savings as the main reason for making eco-friendly upgrades and purchases.
The trend toward green living has encouraged Canadian banks to start offering "green mortgages," which offer home buyers a discounted interest rate and other incentives to buy more environmentally sensitive houses or perform upgrades aimed at lowering their environmental footprint.
The loans aren't open to just anyone, however. Buyers must qualify for the green loan by proving that the house they are buying meets certain green energy standards, or that they will be completing certain green upgrades to the home shortly after moving in, the Ottawa Citizen reports.
Provided your home meets the necessary criteria – primarily having ENERGY STAR rated products and several other high efficiency units – you can receive a lending rate several points lower than the typical posted mortgage. For example, the current rate on the green mortgage from BMO comes in at 3.89%, which could help save some cash over the five year period.
BMO isn't the only Canadian bank in on this, of course. TD also has a similar discounted rate, while RBC and CIBC offer rebates from certain home inspections and energy upgrades. And brokers are active in the space as well, adding eco sensitivity as one more criterion on their shopping list.
Have you gone the green financing route? Good deal or marketing hype? Or can you still do better by dealing through a mortgage broker?
By Gordon Powers, MSN Money
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