Energy Efficiency Series: Green Home? Save Green on Financing!

In our energy efficiency series of articles featured each Thursday, we provide strategies or information on how to make your new home energy efficient and comfortable.

When you are looking at a new home or a home retrofit, you should be aware that the banking industry is tuning into green living. Many now offer “green or eco-mortgages,” which offer home buyers a discounted interest rate or other incentives to buy more energy-efficient houses or upgrades to reduce their carbon footprint.

According to surveys conducted by Leger Marketing, the Canadian “green conscience” is not entirely focused on lessening their impact on the environment. The decision to buy a “green home” is more often driven by the return on investment… saving green. In fact, more than 59 per cent of respondents cite financial savings as the main reason for making eco-friendly upgrades and purchases. This is not surprising, given that 51 per cent of survey respondents say utility costs are the biggest financial surprise when it comes to owning a home. According to Leger, 92 per cent of Canadian respondents recognize the cost advantages of energy efficient home upgrades.

An additional finding is that nearly half of all home buyers plan to invest in energy efficient upgrades in the next year, and this was before the official announcement of the extension of the federal government’s ecoENERGY Retrofit program (allowing for tax credits on a portion of their energy efficiency upgrades).

While almost all of Canada’s big banks have some form of green or eco-mortgages or loans, they aren’t open to just anyone. The home or upgrade must qualify by meeting certain green standards. Conditions of the preferred financing may require an energy audit or recognized third party certification.

Below is a list of a few of the offerings on tap (subject to change at the lender’s discretion):

RBC Energy Saver Mortgage

  • Receive a $300 rebate on a home energy audit
  • Special discounted rates

TD Canada Trust Green Mortgage

  • Offers customers one per cent off the posted interest rate on a five-year, fixed-rate mortgage or 5-year fixed rate portion of a Home Equity Line of Credit
  • Up to one per cent rebate of the amount of the mortgage when home buyers make Energy Star qualified appliance purchases and home upgrades or purchase CSA approved solar panels
  • TD will also donate $100 to the TD Friends of the Environment Foundation charity

BMO Eco Smart Mortgage

  • Offers buyers of green properties a special interest rates on their mortgage
  • In order to qualify for the BMO Eco Smart Mortgage, the home must meet certain requirements as confirmed by a third party appraiser (or energy auditor) arranged by BMO.

Canada Mortgage and Housing Corp. (CMHC) incentive

  • If a person uses CMHC insured financing to buy an energy-efficient home or purchases a house and makes energy-saving renovations to make it more energy efficient, a 10 per cent rebate on the mortgage loan insurance premium may be available.

Special Tip: Mortgage Brokers could be a great information source for which lender has the sweetest deal. Make sure you shop around!

Each Thursday, we will feature a blog entry about energy efficient new homes, covering a range of topics from building innovations to ratings systems to “score” your home’s efficiency. Subscribe to the DrummondHousePlans blog to make sure you get the latest news on how to make your new or renovated home energy efficient.

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