Energy efficient houses cut mortgage defaults by a third

News Item
04 Apr 2013

The risk of defaulting on a mortgage is around a third lower if you live in an energy-efficient home, according to a US study attempting to correlate such risks.

The report was issued by Chapel Hill Center for Community Capital at the University of North Carolina and the Washington-based Institute for Market Transformation (IMT). According to the paper, reduced utility costs from energy saving measures provide homeowners with enough capital to avoid repayment problems that often result in repossessions. However, homeowners are often deterred from making them by the upfront cost of home improvements such as energy-efficient glazing. The authors propose that the lower risks associated with energy efficiency should be taken into account when underwriting mortgages.

The report can be accessed via the following link:

http://www.ccc.unc.edu/documents/HomeEEReport.pdf

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