Low-cost green fixed rate mortgages now available for AIB self-build customers

James Cox

Self-build customers in the process of building or planning to build their own home now meet the criteria for discounted green mortgage rates with the AIB.

A green mortgage is a mortgage which offers a lower interest rate to people who are buying a more energy-efficient home.

Previously, customers could draw down the initial instalments of the self-build mortgage on a variable rate with the option to move to a fixed rate when the mortgage was fully drawn down.

Customers building or embarking on significant renovations of their homes are required to adhere to building regulations, which include nearly zero energy building (nZEB) standards.

This means any new domestic home is required to achieve a building energy rating (BER) of A2 or better and an existing home undergoing significant renovations is required to achieve a BER of B2 or better.

So a self-build customer or those topping up their mortgage to pay for renovations that require planning permission can qualify for AIB’s green mortgage rate, "which is one of the cheapest discounted green rates on the market, by demonstrating compliance with nZEB standards".

The latest Banking and Payments Federation of Ireland data for H1 2023 shows almost a quarter (24 per cent) of first-time buyer mortgages for new build properties were for self-builds, while 42 per cent of mover mortgages for new build properties were self-builds.

In the West region (Mayo, Sligo, and Roscommon) almost three quarters (73 per cent) of loans for new build properties were self-builds.

In border counties (Cavan, Donegal, Leitrim, Louth, Monaghan), self-builds accounted for 49 per cent of new build properties financed by mortgages.

In Galway almost half (46 per cent) of new build properties financed by a mortgage were self-builds, and 35 per cent in Limerick.

The initiative comes after AIB Group reduced its green mortgage rates across AIB, Haven and EBS by 0.2 per cent. AIB Group also recently announced a 50 per cent increase in its switcher payment to €3,000 for customers looking to move their mortgage to AIB, EBS or Haven.

AIB managing director of retail banking Geraldine Casey said: “Building a home or completing renovations can be a challenging process and one of the biggest commitments most of us could imagine undertaking in our lives. Following our recent green mortgage rate reduction, we are now delighted to make our full range of mortgage products available from the start of the build. Today’s announcement is a further demonstration of our commitment to improve our mortgage offering and to make the mortgage process easier for our customers."