How the energy certificate affects your loan conditions

Lea Foster

Energieeffizienz-Expertin, Content-Managerin

Banks require proof of a building’s energy efficiency, and the figures in the certificate directly influence the lending decision, interest rate and even eligibility for funding. Understanding and using your building’s efficiency can save money and secure better financing.

The role of the energy certificate for a bank loan

Banks use the certificate to assess a building’s energy quality and future viability and thus financing risk. A good efficiency class makes financing easier; a poor one makes access to favourable terms harder.

Energy efficiency as an indicator of value and risk

A building with a low efficiency class causes higher operating costs and tends to have higher refurbishment risk. That affects the property’s valuation and creditworthiness negatively. Conversely, a house with a good energy class signals lower running costs and long-term value stability.

Energy certificate as a decision criterion in the loan process

More and more banks make submission of an energy certificate a requirement for property financing, especially for existing buildings. The figures in the certificate feed into their internal risk assessment. For energy-efficient properties there are often better interest rates or dedicated funding products.

Specialised products from green banks

Banks such as UmweltBank and Triodos Bank apply special sustainability criteria for lending:

• UmweltBank: Uses its own “UmweltRating” assessing ecological, economic and social criteria. Buildings with DGNB certification or high energy efficiency (A/A+) receive preferential terms.
• Triodos Bank: Finances buildings with high sustainability standards (e.g. passive or zero-energy houses) and rewards the use of natural materials and energy-efficient refurbishment.

These banks consider not only energy efficiency but also aspects such as choice of materials, land use, indoor health and social criteria (e.g. communal areas).

Higher loan amounts or more flexible terms

Some banks grant higher loan-to-value or more flexible repayment for sustainable buildings, as these are seen as more value-stable. Example: EthikBank finances up to 80 % of the lending value for sustainable building projects and offers individual right to make extra repayments.

Green financing models are gaining importance

In the wake of sustainability and ESG rules, new loan products are emerging specifically for energy-efficient buildings. The energy certificate can serve as proof for classification into an environmentally friendly mortgage programme (Green Mortgage), meaning more attractive interest rates or repayment benefits.

What special offers do banks have for A/A+ buildings, and how are sustainable buildings rewarded in lending?

Banks such as Commerzbank, UmweltBank or ING offer “green mortgages” for A/A+ buildings with interest discounts (0.1%–0.75%). These support sustainable building, often combined with KfW programmes for low-interest loans or repayment grants:

• Commerzbank: Offers “Green property financing” with attractive rates for buildings in energy classes A+ or A, financing up to 60 % of the lending value.
• EthikBank: Offers a triple bonus for ecological building, renewable energy and sustainable materials, independent of KfW programmes.
• Allianz, ING DiBa, HypoVereinsbank: These banks also offer interest discounts for buildings with high energy efficiency classes (A+ or A), with HypoVereinsbank tying its terms to KfW requirements.

Regulatory requirements for banks and borrowers

Not only property owners but also banks face growing regulatory pressure to disclose climate-related risks. The energy certificate helps quantify these risks, making it a relevant control tool for lenders too.

Refurbishment measures and their effect on financing

An energy certificate contains not only information on the current state of a building but also concrete recommendations for energy improvements. These play an important role in financing, especially when refurbishment is planned or necessary.

Modernisation recommendations as part of the financing concept

The measures listed in the certificate (insulation, window replacement, heating renewal) give banks an objective basis to assess refurbishment need. Integrating such measures into your financing plan increases transparency and improves your negotiating position.

Increasing the loan amount through modernisation potential

Banks view it positively when energy refurbishments are planned and costed. That can directly affect the amount of finance, especially when the measures increase property value in the long term. A detailed cost–benefit plan based on the energy certificate is particularly helpful here.

Better terms through planned efficiency gains

Targeted refurbishments that enable a better energy efficiency class increase not only value retention but also access to more favourable loan offers. Some banks already reward concrete refurbishment plans at the lending stage.

Buildings with A or A+ rating often receive better financing conditions with interest discounts of 0.1% to 0.75%. The energy certificate also opens access to KfW funding programmes. Poor ratings (F–H), by contrast, make financing harder because banks see higher risks.

Energy certificate as basis for funding loans

Modernisation measures based on recommendations in the energy certificate are often eligible for funding too, e.g. from KfW or regional programmes. In many cases the energy certificate must even be submitted to apply for funding at all.

KfW programmes such as loan 261 or grant 461 fund measures like insulation or heating renewal. For efficiency-house standards (e.g. EH 55) there is up to €120,000 loan with 25% repayment grant or up to €37,500 grant. Individual measures receive 15–20% grant (max. €30,000). An energy certificate and energy consultant are mandatory. Banks often combine KfW funding with “green mortgages”.

Funding for Worst Performing Buildings (WPB)

The term Worst Performing Building (WPB) describes buildings with particularly poor energy efficiency – typically those assigned to class G or H in the energy certificate. For these properties, special EU requirements and funding opportunities apply, and increasingly so in Germany too.

Definition and significance of WPB

Under the EU taxonomy, Worst Performing Buildings are the most energy-intensive 15% of the building stock. They are considered particularly in need of refurbishment and are in focus for climate targets and refurbishment obligations. For owners this often means a need to act, but also access to targeted financial support.

Refurbishment obligation and legal developments

With the Energy Performance of Buildings Directive (EPBD), the EU is planning binding refurbishment obligations for WPBs. At national level too there is discussion of minimum energy efficiency standards. So in future a poor energy certificate may not only be a cost factor but also trigger a legal obligation to refurbish.

Special funding programmes for WPB refurbishment

Attractive funding is available for energy refurbishment of WPBs, e.g. via KfW or the federal funding for efficient buildings (BEG). Prerequisites include drawing up a refurbishment roadmap and demonstrating a significant efficiency improvement – ideally documented by a new energy certificate.

What concrete funding is there for WPB refurbishment?

Under BEG WG (loan 261) there is up to €150,000 loan per dwelling with 10% repayment grant for efficiency-house standards, and 15% for heat pumps. Grant 461 offers up to €37,500 for individual measures. An energy certificate and energy consultant are mandatory; their costs are partly funded (grant 431). WPB refurbishments are prioritised to sharply reduce energy consumption.

Loan advantages through ambitious refurbishment targets

Banks and funding bodies welcome plans to bring a WPB up to a good energy level through refurbishment. If you take on a WPB and clearly set out how energy efficiency will be improved, you can often expect better loan terms and higher funding amounts.

Further funding beyond bank loans

Besides conventional bank loans there are many funding programmes for energy refurbishment and new builds where the energy certificate plays an important role. It often serves as a prerequisite for funding.

KfW grants (BEG)

Under the “Federal funding for efficient buildings” (BEG) programme, KfW provides attractive grants. Grant 461 offers up to €37,500 for individual measures such as insulation or heating modernisation – or up to €45,000 when a defined efficiency-house standard is achieved. In each case the basis is the energy certificate, which documents the measures and their effect.

Tax incentives

Refurbishment costs can also be claimed for tax. Up to 20% of investment, maximum €40,000, can be deducted over three years under § 35c EStG – provided the energy certificate shows concrete refurbishment need and the measures aim at efficiency improvement.

Energy advice

KfW also funds professional energy advice including issuance of the energy certificate. Under grant 431, up to €8,000 is available for preparing an individual refurbishment roadmap and accompanying advice – an important building block for long-term modernisation strategies.

Regional programmes

Many federal states offer additional funding. Bavaria, for example, supports heat pump installation with up to €4,500. Here too a current energy certificate is part of the application documents.

BAFA funding

The Federal Office for Economic Affairs and Export Control (BAFA) subsidises the use of renewable energy such as solar thermal or biomass systems. The funding rate is between 10% and 35%, depending on technology and the building’s energy efficiency.

The energy certificate as key to better financing

Whether you are taking out a loan, planning refurbishment or applying for funding: the energy certificate is now an important document for any property financing.

It shows how efficient a building is and thus opens up real financial benefits – through better loan terms, higher funding amounts and long-term value increase. Use these opportunities with a professionally produced, legally compliant energy certificate.

To explore the topic further, see these two related articles: Energy certificate costs tax-deductible: how to save tax the right way and Energy certificate and rent index: how energy figures affect rents and property value.