Switching to the best green mortgage deals available could potentially save holders nearly €80 a month, say brokers. Permanent TSB (PTSB) confirmed that existing homeowners will have access to green fixed rates as low as 3.5 percent from the end of July, a development previously announced for new borrowers in May.
To be eligible for this rate, the property secured under the mortgage should have a Building Energy Rating (BER) from A1 to B3. Also, at least three years should remain on the mortgage term. According to Rachel McGovern, director of financial services at Brokers Ireland, this indicates that green mortgages are now offering some of the best rates in the market.
McGovern stated that a client who transitions from an average current rate of 4.17 percent to the new mortgage, possessing a loan to value ratio (LTV) of 60-80 percent, could save €78.16 per month for a mortgage amounting to €250,000 or more. She added that many mortgage holders haven’t reviewed their loans in a few years, thus potentially leaving excessive amounts of their money with their lenders.
For comparison, the Bank of Ireland offers a three-year fixed rate for existing clients: 3.9 percent for a BER A-rated property or 3.95 percent for one with a BER B rating. A bank spokesperson clarified these rates apply to all LTVs and home loan values. Meanwhile, The Allied Irish Bank (AIB)proposes green mortgages starting as low as 3.45 percent.
McGovern believes that due to the recent rise in property values, most mortgage holders are likely to have a considerably better LTV ratio. She suggests that regardless of their BER, this improved ratio might make them eligible for improved loan rates. The former deputy governor of Central Bank, Stefan Gerlach, has suggested a possible interest rate decrease by the European Central Bank (ECB) in September.
Mr Gerlach, who served as the bank’s deputy governor from 2011 to 2015, suggested that inflation in the Eurozone would likely diminish further. This, coupled with an inherent downturn in economic activity, would enable the European Central Bank (ECB) to sustain a reduction in rates. According to Gerlach, who currently holds the position of chief economist at EFG Bank in Zurich, there’s a significant chance for a rate cut to occur in September.