A Green Mortgage

Looking at buying a home? Even the banks can see the benefits of going green and are happy to reward you for it.

In March of 2011, the Bank of Montreal (BMO) began offering a mortgage plan that provides a relatively low lending rate to homeowners whose homes are 'green'. Provided your home meets the necessary criteria -- primarily having ENERGY STAR rated products and several other high efficiency units -- you can receive a lending rate several points lower than the typical mortgage. For example, the current rate on a low five year fixed mortgage from BMO is 4.14%, while the green mortgage comes in at 3.89%, which could save homeowners thousands of dollars over the five year period.

BMO isn't the only Canadian bank in on this. TD also has a similar discounted rate, while RBC and CIBC offer rebates from certain home inspections and energy upgrades.

It's nice to see the private sector starting to pick up some of the slack left behind by the federal government -- ahem, the Harper Government. After years as a success under Liberal and Conservative governments, the ecoEnergy home retrofit program (formerly EnerGuide) was discontinued in March, 2011. The programs had provided Canadian home and business owners with significant rebates for energy-related upgrades, upwards of $10,000 when paired with matching provincial rebates. Given the Conservative environmental platform, its vow to cut the deficit and its new majority government, it seems highly unlikely that any similar program will return anytime soon.

Home retrofits are some of the most economical changes people can make to decrease their environmental impact on the world. Things like weather stripping, insulation and new furnaces can often pay for themselves in energy savings in less than five years. Unfortunately, the high upfront cost can prohibit a lot of homeowners from making such investments, so every little bit helps.

Of course, given the current state of the Canadian economy and the hit the mortgage market took in the last few years, it has become increasingly difficult to get your hands on a mortgage. And given the strict criteria for the plan, this will likely benefit the affluent before the poor. But hey, you have to start somewhere.