Private finance can support the real estate sector in achieving the decarbonization targets set by the 2015 Paris Agreements. Using multiple data sources, the paper presents evidence on the development in Italy of the market for subsided mortgages to households for the purchase of high energy efficiency properties or for improving the energy efficiency of existing buildings ('green mortgages').
Green mortgage market grew significantly in 2021-22. In 2022, about 30 banks (representing almost half the assets of the Italian banking system) granted green mortgages for a total amount of €3.5 billion, or 12 per cent of the total loans they disbursed in the year. Taking as given the characteristics of the applicant and the loan, the interest rates on green mortgages granted by banks between September 2022 and June 2023 were 7 basis points lower on average than those on other loans.
