fotografie peter Hilz (C)

Poor energy efficiency could cost you your mortgage

Belgium’s central bank is asking Belgian banks to collect more information on the energy efficiency of properties when they provide mortgages.  It’s quite likely that in future people purchasing a property with low energy efficiency may have a harder time securing a loan.

The National Bank insists poorly insulated properties form a risk for banks and homebuyers. 

In recent years Belgians have been getting more and more indebted to acquire property.  The reason is clear. Property prices have shot up during the past two decades and wages haven’t kept step.

Part of the National Bank’s job is to keep checks on the commercial viability of Belgian banks.  If more and more mortgage holders struggle to repay loans this too poses a threat to the banks.

Several factors are in play.  Interest rates are going up as are energy prices and with a booming post pandemic economy more and more home hunters are entering the market.

The National Bank wants Belgian banks to map out the energy score of the properties on their books and also collect information when homebuyers apply for a mortgage.  In this way banks will have greater insight into the number of customers who may have to default on their loans.

Homebuyers too are advised to take account of the energy efficiency of the property they are buying.  Poorly insulated homes are often snapped up by people who spend a greater share of their income on mortgage repayments.     

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