On Monday the 3rd of December, the Energy Efficient Mortgages (EEM) Initiative unveiled its definition of an energy efficient mortgage, following an extensive cross-sectoral, market consultation of the lending institutions piloting the energy efficient mortgage framework and of the EEM Advisory Council.
Energy efficient mortgage:
- Energy performance which meets or exceeds relevant market best practice standards in line with current EU legislative requirements and/or
- An improvement in energy performance of at least 30%.
This evidence should be provided by way of a recent EPC rating or score, complemented by an estimation of the value of the property according to the standards required under existing EU legislation. It should specifically detail the existing energy efficiency measures in line with the EEM Valuation & Energy Efficiency Checklist.
The definition is intended as a concrete response to the efforts of the European Commission to construct a capital markets union, to facilitate the clean energy transition in line with the Paris Agreements, and in this context, to build a financial system that supports sustainable growth. It will provide a market benchmark to operationalise the integration of energy efficient mortgages into the business lines of the forty-one pilot lending institutions. At the end of 2017, these lending institutions represented 55% of mortgages outstanding in the European Union, equal to 25% of EU GDP, constituting a significant critical mass in the market.
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