Finance Sustainable Buildings

Mortgage focus shift

Type of instrument



Short term


Mortgage focus shift changes the focus from the offered interest rates to the initial required payment when purchashing a home or developing built to rent initiatives . This instrument proposes to allow the banks to offer mortgages that would cover over 80 percent of the home price if the home is categorized as efficient, sufficient or “green”. Additionally, an European Framework to standardise green mortgages must be developed by the policy makers to bring certainty and clear investement opportunities within the real estate sector.

Its implementation would be based on the credit risk assessment methods established by the European Banking Authority, such as the IRB method (Internal ratings-based approach), making it feasible for clients who are approved to obtain a higher percentage of the value of the house as a mortgage, the instrument would be implemented.

Socioeconomic impacts

Buyers or consumers would benefit from the higher feasibility of purchasing a home which at the same time are characterised as efficient and/or sufficient. However, relaxing the criteria for accessing mortgages categorized as green could lead to increased investor appetite for new housing production, which could lead to an environmental dilemma, as this could boost new housing construction versus renovation while increasing carbon emissions.

Related to

This instrument will enhance individual access to funding to acquire a property while ensuring the funds needed to retrofit a specific real estate asset into an efficient, sufficient or “green” property. Attention must be paid to the conditions required to consider an asset as efficient, sufficient or “green”. These should be validated by an independent third party accredited by a European agency.