|Financing Solution Name
|Energy Efficient Mortgage (EEM)
|Financing Solution Description
|A green or Energy Efficient Mortgage (EEM) is one that is used to finance purchase of an energy efficient building or refurbish a building to a higher standard of efficiency. Lower energy bills resulting from high levels of energy efficiency improve the building owner’s cash flow and improve the building's value and therefore should reduce risk of default and potentially allow lenders to offer higher levels of borrowing and Loan to Value and/or lower interest rates. An EEM aims at incentivising borrowers to improve the energy efficiency of their buildings and/or acquire highly energy efficient properties. The incentives for borrowers could be favourable mortgage financing conditions and/or an increased loan amount at origination to finance the energy efficiency improvement of the property and enhance its Energy Performance Certificate (EPC) level. Both aim to reflect the reduced credit risk of EEMs and drive action to improve the energy performance of building stock.
|Financing Solution Reference
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