Getting Paid to Save With an Energy Efficient Mortgage

By Staff

Getting Paid to Save with an Energy Efficient Mortgage

If you’re thinking of refinancing your home for remodeling, or you want to buy a house and fix it up, look into an energy-efficient mortgage (EEM) to cover the cost of upgrades. These mortgages let you roll the cost of the energy-related improvements into your home loan, even if you exceed traditional loan limits. Your mortgage payments will go up a little, but because your utility bills will also go down, you may even make a little money. As an example:

The Murphy Family’s
Traditional Mortgage    

The Gonzalez Family’s
Energy Efficient Mortgage

Initial Loan $100,000 $100,000
Cost of Energy Improvements       N/A $4,000
Adjusted Loan Amount $100,000 $104,000
Monthly Mortgage Payment $880 $909
Monthly Utilities $126

$71

Total Monthly Expenses $1,006 $980
Net Savings Per Year $312

In this case, the Gonzalez family borrowed $4,000 more up front, but wound up saving $26 per month ($312 per year), and with a home that’s more comfortable and valuable than the Murphys.’