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European Climate, Infrastructure and Environment Executive Agency
News article23 April 2021

The banking sector is getting ready to ride the Renovation Wave with the Energy Efficient Mortgage Initiative

H2020 home energy efficiency

The Energy Efficiency Mortgages Initiative helps European banks to integrate the energy efficiency of homes in mortgage issuance leading to additional financing for energy efficiency improvements to properties. 

Mortgages represent a massive asset for the EU economy, worth 44% of the EU GDP.  European households have in average EUR 18,200 worth of mortgage and over EUR 1 trillion in new mortgages is issued in the EU every year. With the increasing focus of policy makers on home energy renovation, energy efficiency is impacting the future value of European homes and the capacity of homeowners to repay a mortgage. 

Since 2017, thanks to Horizon 2020 Energy Efficiency funding, the European Mortgage Federation has been leading the Energy Efficient Mortgages Initiative. 69 banks and financial institutions have now joined the initiative, representing over 55% of the European mortgage market. By integrating energy efficiency into property valuation mechanisms and affordability assessments, lenders should be able to provide additional financing for energy efficiency improvements to properties. The initiative also developed the technical protocols to report on a mortgage’s energy performance data throughout the mortgage value chain. 

In February 2021, the Energy Efficiency Mortgage Initiative achieved a big milestone with the launch of the Energy Efficient Mortgage label, in the presence of the European Commissioner for Energy, Ms. Kadri Simson. The label is a quality label for consumers, lenders and investors, aimed at identifying energy efficient mortgages in lending institutions’ portfolios. Under the label, banks commit to develop specific mortgage products to finance energy efficient homes or home energy renovation. 

Thanks to the EEMI, capital markets have become eager to finance energy efficient mortgages as they are less risky than non-energy efficient ones and because they answer to the increasing demand for sustainable financial products. For example, in March 2021 OP Mortgage Bank (Finland) issued a green covered bond worth 750 million euros, the first one in Finland, which the bank will use to finance only energy efficient residential buildings. 

The Energy Efficient Mortgage Initiative was funded through Horizon 2020 projects EEMAP and EEDAPP, as well as the new EeMMIP project.  


Publication date
23 April 2021