In Flanders, there is a growing demand for green loans to make homes more energy efficient. Indeed, the Flemish Government has big plans. To increase the energy efficiency of Flemish homes, the energy score of our homes must improve by as much as 75% by 2050. So there is still a lot of work to be done. At the current rate, only 1 in 3 of Flemish homes will be finished in time, so time to take action. Fortunately, when renovating, you can take advantage of a green loan with a lower interest rate. But what exactly does such a green loan entail?
What is a green loan?
A green loan is a loan taken out to perform energy-saving works on your home to optimize the sustainability and quality of your home. This loan is also often given the name energy loan. It is a variant of a renovation loan, but is thus intended for energy-saving works. In Flanders, there are different types of social loans or credits to build or renovate your home, one of which is a green loan.
A green loan has several advantages:
- Lower interest rate: green loans have a lower interest rate than regular loans. The favorable interest rate is around 2%. This means you have to pay back less money over the term of the loan , which again saves you money.
- Increasing the value of your home: energy-saving renovations can increase the value of your home.
- Lower energy costs: the works will make your home more energy efficient, which will lower your energy bills.
- Living more sustainably: by choosing a green loan, you are contributing to a more sustainable future for our planet.
What can you use a green loan for?
In principle, anyone who wants to carry out energy-saving works can apply for a green loan. So you use this loan to carry out renovation works in your best to finance the home. The term “energy saving” is very broad and includes different types of works. In this list you can see some examples:
- Roof or attic floor insulation
- High-efficiency glass
- Wall insulation
- Floor insulation
- Air sealing and air tightness test
- Energy efficient ventilation systems type C or D
- Economical heating system (e.g., condensing boiler, heat pump, pellet boiler or stove, fuel cells, etc.)
- Photovoltaic solar panels
- Solar water heater or other economical domestic hot water system
- Replacement of light fixtures and lamps
- Energy-efficient household appliances
- Energy storage technologies and management systems
- Energy Audit
- Home Batteries
- Smoke Detectors
- Alarm System
It is advisable to always check carefully in advance which works are or are not eligible, this way you avoid unnecessary costs. Here are some examples of works that you cannot finance with a green loan:
- Aesthetic works, such as painting the facade.
- Works partially funded by the government, such as in social housing.
- Works that do not meet the technical requirements and criteria set for energy-saving works.
- Works for which the applicant has already taken out a green loan and has not repaid it in full.
Are there any conditions?
The conditions for applying for a green loan in Flanders may change in the future, but currently the following general conditions apply:
- At least 50% or 75% (depends on the lender) of the renovation work must be energy-saving.
- You must be able to prove the works by invoices or quotes.
- You are an individual living in Flanders.
- The amount borrowed is between €1,250 and €75,000, depending on the lender.
- The term of the loan goes up to a maximum of 15 years.
- You should be able to submit the necessary documents, such as proof of income and property, to the bank of your choice to verify the application.
For the most up-to-date information and specific details, it is best to consult the Flemish Government website or contact an approved lender.
Bhat banks can I go to?
There are several banks in Flanders where you can go for a green loan. Below is an overview of some of the major banks that offer green loans:
The interest rate of a green loan varies from bank to bank. In general, green loans have a lower interest rate than regular loans. The interest rate is determined by several factors: the term of the loan, the amount borrowed and creditworthiness. The interest rate may also depend on the energy-saving works you want to finance. So always compare different banks and request quotes to determine the best interest rate for your specific situation.
There are also other institutions that offer green loans, such as energy cooperatives and local governments. Also consult the options of these providers before making a decision.
What about larger remodeling jobs?
Since September 1, 2022, you can apply for a “My Renovation Loan” from the Flemish Government (replaces the interest-free Flemish energy loan). This loan, like a green loan, is intended to finance energy-saving renovation work on your home and is offered by The Energy House. The loan has a maximum amount of € 60,000 and a maximum duration of 25 years. This loan is interest-free, as long as the legal interest rate remains below 3%. This is currently not the case, resulting in an interest rate of 2.25% since February 1, 2023. Because of the large application, the waiting period is up to 3 months. So apply for the loan in good time. Unfortunately, not everyone can apply for the My Reconstruction Loan. On the website of the Flemish Government you will find the 5 target groups who are eligible. Find out if you meet the conditions. Since the Flemish Government often changes the regulations concerning housing, we always keep our website up-to-date for you. Curious about the current state of affairs? Discover the most current changes in 2023.