Deutsche Bank, EIB Launch Discounted Mortgage Program to Finance Climate-Friendly Homes
Deutsche Bank and the European Investment Bank (EIB) Group announced a new agreement to provide discounted mortgages aimed at promoting the construction of new climate-friendly homes and energy-efficiency modernizations of existing housing in Germany.
Under the new program, the EIB Group will guarantee a €150 million mezzanine tranche in a consumer loan securitization with Deutsche Bank, freeing up regulatory capital for Deutsche Bank, with the advantage passed onto the bank’s clients in the form of discounted mortgages.
In order to be eligible for a discounted mortgage under the new program, borrowers will be required to meet stringent criteria, such as a 30% reduction in primary energy demand for a home modernization.
Overall, Deutsche Bank and the EIB said that the new program aims to provide more than €600 million of low-interest mortgages to help build climate-friendly houses.
EIB Vice-President Nicola Beer said:
“Climate-friendly housing is a top priority for people because it helps them reduce energy costs and enhances their comfort and well-being. Our cooperation with Deutsche Bank will enable thousands of households in Germany to construct green homes or improve the climate footprint of existing houses.”
The launch of the new program follows a series of sustainable finance goals announced last year by Deutsche Bank, including a target to enable a total of €500 billion in sustainable financing and investments between 2020-2025. The program also marks a continuation of the bank’s sustainable finance collaboration with the EIB, including the launch of a €400 million collaboration last year aimed at supporting sustainable transformations at medium-sized companies.
Achim Kuhn, Head of Product Management at Deutsche Bank, said:
“The important cooperation with the EIB Group enables us to expand our mortgage financing business and offer clients additional financing options. By offering favourable conditions for mortgages, we can specifically help individuals who want to invest in energy-efficient housing. As a reliable partner to our clients, we are taking a big step forward together in reducing energy consumption and CO2 emissions and protecting the environment.”