To qualify, a home must exceed national energy efficiency standards
Kathryn Young
Sun
Kosta Hatzidimitriou was surprised, then pleased when he stumbled upon a green mortgage for his recent purchase of a three-bedroom single-family home.
“The wife and I are trying to get more environmentally conscious and energy efficient,” he said. “Personally, I think it’s about time the banks got involved [in enviro-friendly products] because everybody else is.”
His new Citizens Bank of Canada mortgage included a $10,000 line of credit at prime for energy-efficient upgrades. and a blue recycling bin filled with $875 worth of information and coupons, including a $375 home energy audit to help determine what improvements can be made to his 18-year-old Toronto-area home.
“It’s interesting to find out a bank is doing this instead of some government agency,” Hatzidimitriou said. “I like that.”
Banks and credit unions are starting to offer what they call “green mortgages” and “green loans” for energy-efficient improvements, and plan to roll out more products in the coming months.
Vancity Credit Union (which wholly owns Citizens Bank) has been involved for many years in financing green and sustainable commercial properties, and now offers a climate change mortgage. Vancity doesn’t advertise this mortgage; instead it takes the money usually spent acquiring mortgage business — $1,250 per mortgage — and invests it in a climate change fund.
Citizens Bank began offering green mortgages last April in Ontario and will expand them to other provinces by next spring, said John Filice, director of residential mortgages.
Even some of the bigger banks are examining green possibilities.
“We are very seriously looking at this,” said Kelly Hechler, spokeswoman for TD Canada Trust. “We know there’s interest out there. We’ve seen it in polls we’ve done of homeowners who say it’s becoming an important thing to them.”
Although they’re a first step toward making Canadian homes more energy efficient, these financial deals don’t always meet the more strict definition of a green mortgage or green loan that government and green building promoters would like to see.
Gordon Shields, co-ordinator of the Net-Zero Energy Home Coalition, said a green mortgage usually refers to preferential interest rates for a mortgage on a home that’s measurably more energy efficient than one built to the provincial or national building code, such as R-2000, Energy Star, Built Green, Power Smart or Novoclimat homes. The homes are labelled and the energy efficiency measured, and tying the mortgage to that measurement is important.
“That would be a key component,” said Shields. “We would want to see a green mortgage premised on exceeding the national building code standard or national average.”
Steffan Jones, manager of home ownership policy for the insurance sector at Canada Mortgage and Housing Corp., also said he doesn’t consider them true green mortgages.
“A lot of this is marketing,” Jones said. “But there is a benefit. If they’re encouraging people to get energy audits and at least think about it and perhaps know what kinds of improvements they can make, that’s the benefit that can’t be quantified.”
Since 2003, CMHC has offered an incentive for homebuyers who need mortgage insurance to buy certified energy-efficient homes or to buy existing homes and make them more efficient: they can receive a 10-per-cent refund on their mortgage loan insurance premium and extended amortization periods of up to 40 years without any surcharges. All homes must be either certified under one of the energy-efficiency programs or have energy audits to prove their energy-efficiency rating.
“Anything that makes things more energy efficient, there’s nothing wrong with that,” said Shields, whose group promotes net-zero-energy homes that produce as much energy (solar, wind or geothermal) as they use in a year.
True green mortgages and loans would help Canada‘s housing supply become more energy efficient much faster, Shields said. Buildings produce about 40 per cent of Canada‘s greenhouse gas emissions, according to the Canada Green Building Council.
Meanwhile, it’s been a learning experience for Hatzidimitriou as he goes through his blue box of coupons and information.
“It’s definitely made me revamp my plan for the future,” he said, adding that he’ll now put money into energy-efficient changes rather than landscaping, ceramic floors or granite counters.
© The Vancouver Sun 2007
