Coop Bank Offers Zero-Margin Loan for a Year to Energy-Efficient Homes
Coop Bank has started offering home loans to its customers for purchasing or building the most energy-efficient, i.e., A-energy class homes, with a bank margin of 0% + 6-month average euribor in the first year.
According to Karin Ossipova, head of Coop Bank's home loan business line, Coop Bank wants to encourage the purchase of more energy-efficient homes and thereby help reduce climate impact. "A-energy class homes usually cost more at the time of purchase, but over a longer period they help owners save on energy costs and are more environmentally friendly. We want to encourage our customers with this offer to prefer energy-efficient homes and thus save on their daily expenses," said Ossipova.
Coop Bank's customers can get a home loan offer for purchasing or building an A-energy class home, where the interest in the first year consists of a 0% margin and only 6-month euribor needs to be paid. To receive this offer, the loan application must be submitted to the bank no later than June 30, 2023, and the first loan disbursement must take place no later than April 30, 2024. If a year has passed since the first disbursement of the preferential loan, the regular risk margin applies to the loan starting from 1.7% (to which 6-month euribor is added).
Currently, A-energy class homes account for approximately 4% of Coop Bank's home loan portfolio, and the share of such homes has grown significantly in this year and last year. "This shows that people are increasingly interested in A-energy class homes and the market is also seeing more and more energy-efficient residential buildings. Although the vast majority of residential space in Estonia continues to remain below A-energy class, due to the implementation of near-zero energy requirements for new small and apartment buildings, much higher loan demand is expected in the coming years, specifically for the acquisition of A-energy class assets," said Ossipova.
To increase the number of more energy-efficient homes, Coop Bank also works closely with KredEx, which provides guarantees for residential housing for the purchase of new homes or renovation of existing ones. Coop Bank accepts the energy efficiency guarantee offered by KredEx for individuals, which makes it possible to reduce the financial self-financing requirement and get more loans from the bank specifically for purchasing or building an energy-efficient home and for energy-efficient renovation of a home. In addition, you can also combine a home loan with the small building renovation support offered by KredEx. Since yesterday, April 10th, KredEx also offers renovation support for apartment buildings to achieve greater energy efficiency, and housing associations for whom support funds alone are insufficient can apply to banks for loans to carry out the necessary work.
Approximately one-third of the energy used in Estonia is consumed by residential buildings, so by making buildings more energy-efficient, environmental impact can be significantly reduced. An energy label is a document that provides an overview of your home's actual energy consumption – how much energy is needed for heating, electricity, water heating, etc.
