Wednesday 24 July 2024
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Home Energy Upgrade Loan Scheme

Home Energy Upgrade Loan Scheme
  • Interest rates as low as 3%, homeowners can borrow from €5,000 to €75,000 to make their homes warmer and more energy efficient

AIB and Bank of Ireland have now joined PTSB in the government-backed, €500 million Home Energy Upgrade Loan Scheme.

AIB and Bank of Ireland are the latest financial institutions to offer loans under the scheme, with rates starting from as low as 3% (pricing varies depending on the finance provider). The participation of these two pillar banks, along with PTSB, who currently offer loans under the scheme, significantly increases competition in the market, providing homeowners with more choice and giving them the opportunity to avail of rates that are significantly lower than what is currently available on the market.

In addition to the three pillar banks, it is expected that a number of credit unions from the Irish League of Credit Unions will join the scheme in the coming weeks, which will allow more people to access these affordable loans in their own communities. Additional finance providers are expected to commence offering loans later this year.

The scheme works hand in hand with SEAI grant programmes, and loans can be used for a broad range of home energy upgrades. Homeowners can apply for the loans directly through the participating finance providers.

Key features of the Home Energy Upgrade Loan Scheme

  • Homeowners (including small, non-corporate landlords) may borrow between €5,000 and €75,000 for up to 10 years
  • Loans are unsecured – that is, there is no charge taken over the property as is the case with a mortgage
  • The purpose of the loan must be to carry out home energy upgrade works
  • The residential property being upgraded must be located in the Republic of Ireland
  • The home energy upgrade works must qualify for a home energy grant from the Sustainable Energy Authority of Ireland (SEAI) and must be projected to result in a minimum 20% improvement in the energy performance (Building Energy Rating – “BER”) of the property
  • The works must be carried out by an SEAI registered One Stop Shop, Energy Partner or Communities Project Coordinator. These SEAI-registered contractors offer homeowners all the services required for a complete home energy upgrade and can advise whether the planned works meet the requirements for the loan scheme, as well as advising on the grants that may be available from SEAI
  • Up to 25% of the amount borrowed may be spent on non-energy efficiency works, for example, other home improvement works carried out at the same time as energy upgrade works (excluding any form of installation of fossil fuel boilers)
  • Loans will be available for drawdown up to 31 December 2026 or until the scheme has been fully subscribed (whichever is earlier)
  • Loans will be subject to the normal lending criteria, terms, and conditions of the participating finance providers
  • When approved, the loans can be drawn down before works begin. This gives certainty to homeowners that they have the funds for the planned energy upgrades as well as any up-front costs or milestone payments. This is often identified by homeowners as a key barrier to upgrading their homes
  • At the moment, most green home improvement loan interest rates hover between 6% and 7%, with other personal loan rates ranging up to 14%. As an additional bonus, households could also qualify for a lower-cost green mortgage in the future after they use their low-cost loan to improve their BER rating up to the required level
  • The loans can be used by homeowners who want to undertake a deep retrofit involving several energy upgrades at the same time or to carry out one or two upgrades that will significantly improve the energy performance of the home
  • Those most at risk of energy poverty can continue to avail of fully funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will make it easier for those above the eligibility threshold to upgrade their homes

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