Green homes are all the rage these days, and the Bank of Montreal's latest mortgage offering appeals to those who focus on these properties.
The BMO Eco Smart Mortgage offers a 3.89 per cent fixed five-year rate for Canadians who choose energy efficient homes. The regular posted fixed rate for a five-year mortgage term from BMO is 5.34 per cent.
Qualification for the Econ Smart Mortgage will be determined by an appraiser for homes that include high-efficiency heating and cooling systems, qualified hot water systems, and high-quality attic insulation or windows and doors, according to a news release by BMO.
Katie Archdekin, head of mortgage products for BMO, said the green mortgage product is designed to encourage homeowners to limit their energy use and thus their cost of owning a home.
“Canadians want to decrease their carbon footprint and recognize that their home is one of the key ways they can do so,” she said.
BMO's Eco Smart Mortgage is the among the first of its kind in the industry, and seeks to provide rewards and rebates for owners of greener properties.
There are also other options available. Energy-saving property owners can also choose from the Royal Bank of Canada Energy Saver Mortgage, which refunds up to $300 on a home-energy related improvement.
The Canadian Mortgage and Housing Corporation has also pitched in to support greener housing across the country. Their Green Home program features a 10 per cent refund on the mortgage loan insurance premium and extended amortization periods without surcharge.
Thus far, the CMHC has given out $3 million in premium refunds through that program. Another product is TD Canada Trust’s Green Mortgage, which offers a rebate of up to 1.5 per cent on the cost of a mortgage with qualified purchases.
As interest and demand for eco-friendly housing increases in Canada, it's expected that the other major banks may also create new mortgage products targeted towards green initiatives. Energy efficient housing is the way of the future, and the financial world will find ways to adapt to them over time.