It isn’t just cosy to live in an energy-efficient house – it might also mean that it has “zero on the meter” if you generate your own energy and use it all to power your life.
This is increasingly interesting to clients at Expat Mortgages, according to mortgage consultant Simon Bosschieter. He has helped scores of customers apply for financing to make their homes greener or take out a loan with an extra “building fund” for a fixer-upper.
“Nowadays, the prices for totally renovated properties are significantly higher compared with a few years ago, so for some people it’s an idea to buy a relatively older property that needs lots of renovation, and do the renovation themselves,” he said. “A bank is willing to provide the extra amount on the mortgage as long as it’s increasing the value of the house, and you can also borrow a little bit more to improve the energy label.”
Say you have found a property that is already green, but is also more expensive: the mortgage rules give you extra lending room to finance it. Since 2015, it has been obligatory for all sellers (except national “monuments”) to provide an energy label from an independent company to show how energy-efficient their property is. Things like wall, floor and roof insulation, heat pumps, solar panels and the risk of high internal temperatures in the summer are all measured to give a rating.
If you buy something as leaky as a sieve and want to insulate it, you can borrow an additional €20,000 for the least energy-efficient homes rated E, F or G. Those with a C or D mark can be improved with a special mortgage fund of up to €15,000. You can also get a slightly higher mortgage to help buy the best-insulated properties, from B to A++++. Government advisers have recommended that, from 2026, you can borrow slightly less for the very greenest homes but there will still be up to €40,000 in boosted mortgage room available (meaning you can take on a loan of more than 100% of a property’s value).
“The better the energy label is, the more you can borrow,” says Simon. “And besides that, you can also borrow more, because the rates banks offer you based on a house with a better energy label are lower compared with one with a worse label. If you have to pay 3.5% interest, your monthly payment is less than with 4%, which means you can afford a higher mortgage. The idea is that the banks want to stimulate buying houses with better energy labels.”
Actually, there’s a sensible financial reason: if houses are energy efficient and safe from the impact of climate change, the mortgage lender is taking less of a risk. So when you are checking out your insulation, it’s also a good idea to check your flood risk and rainfall risk – including whether you are in an area protected by dikes or one that is not covered by a normal buildings insurance policy.
If you are buying a fixer-upper (having checked it is in a safe area!), then you might have to deal with two different renovation funds, the EBB and the EBV, for energy-saving measures. This money is not given to you directly but held in a fund that you will use to submit the receipts of your contractors. “It’s going to stay in deposit because the bank wants to know you are going to use it for renovations and not for buying a nice Ferrari!” says Simon. “You submit the invoices and the bank is going to pay the amount directly to you or to the contractor.”
The bank will look at the potential value of the house once the measures are done – and while every square metre you add increases the value directly, cosmetic additions have their limits. Bear in mind that you may need planning permission for any changes to the outside of your property, and if you are buying a national or city monument, or even something that faces the street, local rules can be strict. “Once, someone was planning to build a dormer and didn’t get permission from the municipality so he only did the solar panels, and paid back the rest of the fund to the mortgage because we needed to cancel the deposit,” he says. “You can also have huge plans for renovations but the neighbourhood is also important: if you build a house for a million in a neighbourhood with an average value of €400,000, that could go wrong.”
But, just as more banks are cautious about giving loans for houseboats, in future it might even be difficult to get a loan on a house that isn’t energy efficient and future-proof. “Now, it’s almost impossible to finance a houseboat,” says Simon. “And that could be the future for houses with worse energy labels.”
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