Some banks and credit unions in North America provide Green Mortgage programs, which reward borrowers for using more energy efficient homes. It may be necessary to have a qualified inspector verify the home’s efficiency before a borrower can apply for this kind of mortgage. Here are some more details on what a green mortgage is and how it works.

For example, North Carolina State Employees’ Credit Union offers a green mortgage on homes which meet the Energy Star standard. Borrowers qualifying for this mortgage receive lower interest rates and don’t have to pay as high of an origination fee. Another example is Columbia Credit Union’s Living Green mortgage; it claims to reduce costs by “up to $1,500″ if the mortgaged home has qualified for Earth Advantage, Leadership in Energy and Environmental Design (LEED), or Energy Star.

These mortgages vary significantly in what they offer. A different program from TD Canada Trust gives rebates to borrowers when they purchase products which have received Energy Star certification. They also offer a Green Home Equity Line of Credit, which works in a similar way. In the United Kingdom, the Norwich and Peterborough Building Society plants forty trees (among other benefits) when someone initiates a new Green Mortgage. Another lender offers to reduce closing costs by four-hundred dollars.

So what are the main benefits of a Green Mortgage program? They help the borrower by decreasing closing costs and/or interest rates. The main benefit to the lender is that such mortgages help attract borrowers who are concerned with energy efficiency. These programs reduce the negative impact upon the environment by encouraging people to build and buy homes which are energy efficient, or raise the efficiency of existing houses. Thus they provide some advantages to all parties involved.

Ways to improve the energy efficiency of a home include adding insulation or installing Energy Star qualified appliances, cooling/heating systems, and fixtures. In addition to potentially qualifying for green mortgages and home equity loans, such measures can decrease electricity and heating fuel costs, while limiting pollution.

Other lenders with green mortgage and/or home equity loan programs include Bank of America, Citizens Bank of Canada, and Seattle Metropolitan Credit Union. Some also offer Green Auto Loans, which decrease interest rates when people borrow money to purchase a fuel efficient vehicle. Both types appear to be most common among major national banks and local credit unions.