In December 2023, the Government and the European Investment Bank (EIB) announced a new €500m initiative to encourage homeowners to invest in energy efficiency, called Home Energy Loan Scheme (HELS). Frustration has been felt by homeowners waiting for this scheme as many are holding off on energy upgrades until the loan is available. The original anticipated launch date of January was pushed back until March and no clear timeline has been given, other than officials stating its launch is “imminent”. Homeowners will be able to borrow from €5,000 to €75,000, unsecured, for a term of up to 10 years at low interest rates.
The scheme will be delivered by the Strategic Banking Corporation of Ireland (SCBI). The loans can be used for energy efficiency measures, where those works are also being grant-aided by the Sustainable Energy Authority of Ireland (SEAI).
Key features
•Applicants can borrow between €5,000 and €75,000 per property
•Flexible repayment terms from one to 10 years
•No security or personal guarantee required
•Interest rates will be significantly lower than those currently available in the market
How to apply
There is a two-step process to apply for a loan under the HELS. The first step is to carry out a home energy assessment or BER with quotation for works that you bring to a qualifying credited provider to start the process.
The second step is the credit application process. Homeowners are expected to be able to apply for the loans in the first half of 2024 through participating banks.
In order to avail of this scheme, the property needs to be residential, and mixed used properties are not included. As long as derelict homes qualify for a relevant SEAI grant, they will also be able to qualify for the Home Energy Loan Scheme.
Affordability
A lack of funding and affordability is being cited as a key barrier facing people considering home energy upgrades.
“Given different loans with different characteristics, interest rates, repayment periods etc, the interest rate remains the defining factor in a home owners’ decision to take one loan over another or go to one provider over another,” says Roisin Mulligan, Programme Executive Sustainable Finance with SEAI.
“Research shows that reducing the loan interest rate from 10% down to 2% could result in a 50% uptake in the number of people who are willing to upgrade their homes,” she says.
“Even with low-cost finance options, grants are going to remain an important part of the incentive to encourage home owners to upgrade their homes.
“A combination of the low-cost finance and the grant prompts a home owner to take action,” says Roisin.
Roisin Mulligan, Programme Executive Sustainable Finance, SEAI
Green loans
An emerging area in the finance market is that of green loans and green mortgages. This has come from an increased onus on financial institutions to comply with the EU taxonomy, to show their investments are green, and to be transparent on their activities and their impact on their environments. Home owners benefit from this through a lower interest rate for a certain portion of the loan term if theirs is termed a ‘green mortgage’.
A ‘green loan’ is a form of financing that is used to exclusively fund projects that make a substantial contribution to an environmental objective. The loan is offered with a lower annual percentage rate (APR) compared to other loans. If you’re a homeowner looking to carry out energy improvements it is a good idea to search the different green loan providers and get financial advice on funding your project.
All of the financial providers are offering customers different green loans and green mortgages. The most important criteria is that the money you borrow must go towards making home improvements to reduce emissions, or electric vehicles in some cases. Here, we take a look at the different available loans.
Credit union: A very popular provider of green loans among home owners is the local credit union. The majority of people seem to be opting for this provider to help them finance their retrofitting and home energy upgrades. For credit unions with a dedicated home improvement loan rate, the average loan rate was 7.7% APR and the lowest rate was 4.33% APR.
AIB: You can borrow up to €60,000 with AIB in its green loan option. Some 50% or more of the money must be spent on a specified green initiative including; insulation, window and door upgrades, renewable energy sources, hybrid electric vehicles and home charger units. The loan is offered with a lower rate of 6.40% APR.
Bank of Ireland: Bank of Ireland has a green home improvement loan offering a variable rate of 6.50% APR. Loans are offered from €2,000 to €65,000 for a period of one to seven years. Work being undertaken must include one of their energy upgrades to qualify for green home improvement loan.
Green mortgages
Permanent TSB is offering a new green mortgage with a lower rate of interest to its home loan customers, available if you are buying, building, structurally renovating or currently own a high energy-rated home, and your home has or will have a building energy rating of A1 to B3 (inclusive).
Its green three-year fixed rate option is only available for new customers but it also has a green five-year fixed rate option available for both new and existing business customers. As an existing customer, you must have five years or more remaining on your mortgage term. The loans are starting at rates of 3.80% APR. Figure 1, bottom left, shows the difference between a green mortgage and a standard mortgage for a high value three-year fixed rate. Based on a €300,000 loan, availing of the green mortage saves the homeowner a total of €7,539.04.
Get financial advice
Whether you are thinking of using your savings, drawing down a loan from a bank or opting for the new Home Energy Loan Scheme (HELS), there are many financial options available to help you fund your retrofitting journey.
The main thing is to apply for the grants available to help reduce the final cost of improving energy efficiency and get appropriate financial advice.
Irish Farmers Journal Renewable Roadshow
The upcoming Irish Farmers Journal Renewables Roadshow will provide an overview of the grant aid options available for retrofitting your home, including SEAI individual energy upgrade grants, one-stop shop services and fully funded energy upgrades. We’ll also run through what you need to know about the Vacant Property Refurbishment Grant.
For more details and to register log on to ifj.ie/renewables.
Read more
Consumer: the cost of home energy upgrades
Consumer: retrofitting your home to unlock better energy
In December 2023, the Government and the European Investment Bank (EIB) announced a new €500m initiative to encourage homeowners to invest in energy efficiency, called Home Energy Loan Scheme (HELS). Frustration has been felt by homeowners waiting for this scheme as many are holding off on energy upgrades until the loan is available. The original anticipated launch date of January was pushed back until March and no clear timeline has been given, other than officials stating its launch is “imminent”. Homeowners will be able to borrow from €5,000 to €75,000, unsecured, for a term of up to 10 years at low interest rates.
The scheme will be delivered by the Strategic Banking Corporation of Ireland (SCBI). The loans can be used for energy efficiency measures, where those works are also being grant-aided by the Sustainable Energy Authority of Ireland (SEAI).
Key features
•Applicants can borrow between €5,000 and €75,000 per property
•Flexible repayment terms from one to 10 years
•No security or personal guarantee required
•Interest rates will be significantly lower than those currently available in the market
How to apply
There is a two-step process to apply for a loan under the HELS. The first step is to carry out a home energy assessment or BER with quotation for works that you bring to a qualifying credited provider to start the process.
The second step is the credit application process. Homeowners are expected to be able to apply for the loans in the first half of 2024 through participating banks.
In order to avail of this scheme, the property needs to be residential, and mixed used properties are not included. As long as derelict homes qualify for a relevant SEAI grant, they will also be able to qualify for the Home Energy Loan Scheme.
Affordability
A lack of funding and affordability is being cited as a key barrier facing people considering home energy upgrades.
“Given different loans with different characteristics, interest rates, repayment periods etc, the interest rate remains the defining factor in a home owners’ decision to take one loan over another or go to one provider over another,” says Roisin Mulligan, Programme Executive Sustainable Finance with SEAI.
“Research shows that reducing the loan interest rate from 10% down to 2% could result in a 50% uptake in the number of people who are willing to upgrade their homes,” she says.
“Even with low-cost finance options, grants are going to remain an important part of the incentive to encourage home owners to upgrade their homes.
“A combination of the low-cost finance and the grant prompts a home owner to take action,” says Roisin.
Roisin Mulligan, Programme Executive Sustainable Finance, SEAI
Green loans
An emerging area in the finance market is that of green loans and green mortgages. This has come from an increased onus on financial institutions to comply with the EU taxonomy, to show their investments are green, and to be transparent on their activities and their impact on their environments. Home owners benefit from this through a lower interest rate for a certain portion of the loan term if theirs is termed a ‘green mortgage’.
A ‘green loan’ is a form of financing that is used to exclusively fund projects that make a substantial contribution to an environmental objective. The loan is offered with a lower annual percentage rate (APR) compared to other loans. If you’re a homeowner looking to carry out energy improvements it is a good idea to search the different green loan providers and get financial advice on funding your project.
All of the financial providers are offering customers different green loans and green mortgages. The most important criteria is that the money you borrow must go towards making home improvements to reduce emissions, or electric vehicles in some cases. Here, we take a look at the different available loans.
Credit union: A very popular provider of green loans among home owners is the local credit union. The majority of people seem to be opting for this provider to help them finance their retrofitting and home energy upgrades. For credit unions with a dedicated home improvement loan rate, the average loan rate was 7.7% APR and the lowest rate was 4.33% APR.
AIB: You can borrow up to €60,000 with AIB in its green loan option. Some 50% or more of the money must be spent on a specified green initiative including; insulation, window and door upgrades, renewable energy sources, hybrid electric vehicles and home charger units. The loan is offered with a lower rate of 6.40% APR.
Bank of Ireland: Bank of Ireland has a green home improvement loan offering a variable rate of 6.50% APR. Loans are offered from €2,000 to €65,000 for a period of one to seven years. Work being undertaken must include one of their energy upgrades to qualify for green home improvement loan.
Green mortgages
Permanent TSB is offering a new green mortgage with a lower rate of interest to its home loan customers, available if you are buying, building, structurally renovating or currently own a high energy-rated home, and your home has or will have a building energy rating of A1 to B3 (inclusive).
Its green three-year fixed rate option is only available for new customers but it also has a green five-year fixed rate option available for both new and existing business customers. As an existing customer, you must have five years or more remaining on your mortgage term. The loans are starting at rates of 3.80% APR. Figure 1, bottom left, shows the difference between a green mortgage and a standard mortgage for a high value three-year fixed rate. Based on a €300,000 loan, availing of the green mortage saves the homeowner a total of €7,539.04.
Get financial advice
Whether you are thinking of using your savings, drawing down a loan from a bank or opting for the new Home Energy Loan Scheme (HELS), there are many financial options available to help you fund your retrofitting journey.
The main thing is to apply for the grants available to help reduce the final cost of improving energy efficiency and get appropriate financial advice.
Irish Farmers Journal Renewable Roadshow
The upcoming Irish Farmers Journal Renewables Roadshow will provide an overview of the grant aid options available for retrofitting your home, including SEAI individual energy upgrade grants, one-stop shop services and fully funded energy upgrades. We’ll also run through what you need to know about the Vacant Property Refurbishment Grant.
For more details and to register log on to ifj.ie/renewables.
Read more
Consumer: the cost of home energy upgrades
Consumer: retrofitting your home to unlock better energy
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