Investing in sustainability: Mortgage or Green Loan?
Making the home more sustainable is becoming increasingly popular, knowledge about costs is lagging behind.
More and more Dutch consumers want to invest in a more sustainable home, according to a study by market research agency Ipsos. Both homeowners and tenants are increasingly concerned about the environment, but also see an opportunity to save on energy costs through making their home more sustainable.
Making homes more sustainable
Making homes more sustainable is on the rise, but certainly not commonplace. How much money is needed to make provisions that make a home more sustainable? 71% of not yet have a good understanding of this.
8% think of an investment of more than € 10,000. 7% are considering measures that cost € 5,000 to € 10,000 and the rest of the researchers want to spend less than € 5,000 on sustainability.
We see more or less the same picture with knowledge about payback period of energy saving facilities: more than 50% say they do not know well when the measures will become profitable. This does not apply to solar panels, more than 60% has the clear feeling that this popular investment is earned back within 10 – 15 years.
In practice, the figures are slightly more favorable, according to the consumer association: solar panels will last around 25 years. They are usually paid off after 7 years, so that the house has at least 15 years of free electricity.
How to finance
More than 70% of Dutch households are seriously considering taking sustainable measures for their homes, to save both energy and the environment.
But often it is still time to think. What is stopping these consumers from taking action? In practice, it comes down to insufficient knowledge about the costs, but also about the payback time and future returns. And those who can’t afford the solar panels, heat pump or roof insulation from their own savings or subsidy must look for financing.
Borrowing money for sustainability / home improvement is not popular with 6% of consumers. Homeowners are also not eager to raise their mortgage as a financing option (only 9%). Although this percentage increases by a jump to 21% with investments of more than 10,000 euros, according to the same study by Ipsos.
Not 6%, but 20% consumer credit
At From Good Finance, however, we see very different numbers. We process 30,000 applications annually, of which around 20% (!) For the ‘home improvement’ spending purpose.
A very different percentage than the 6% that emerges from the Ipsos study. Why do consumers prefer to indicate in the survey that they want to increase their mortgage for home improvement, while practice shows that the number of applications for a consumer loan is over € 20,000 comparatively high?
Personal Loan excellent option
In summary: those who do not have the budget for a sustainable renovation in the house or cannot count on a subsidy must look for financing for the plans. Increasing your mortgage seems like a good solution, but in practice you are more expensive because of the long term. Moreover: why would you still pay for solar panels that have long been profitable?
If we look at the facts, borrowing money through a Personal Loan is a great option to make your home more sustainable. Both the duration and the interest rate are fixed, so you always know where you stand. Moreover, the Personal Loan is paid off much earlier than a mortgage.
There is nothing wrong with borrowing money for making a more sustainable home. After all: how chic is it to invest money in something that not only benefits you but also the environment ?!
Are you also planning to make your home more sustainable? Discover directly via our loan guide whether a Personal Loan fits your situation and your plans.