Often when we as individuals think about a sustainable or an eco-positive lifestyle, we think about our own behavior. And when we look at our own behavior, we tend to look at details as well. We look at recycling or cutting food waste, when the biggest impact is in the supply chain of the products we buy or the food we consume. On this blog, I try to change this and make you look at the biggest impact first. However, when we look at our behavior we often miss another important aspect of sustainability. We don’t look at our resources. Our money, simply said. But, as we all know, money rules the world. And so it’s extremely important to spend it responsibly. And so, today I want to tell you about the importance of a sustainable mortgage.
Why a sustainable mortgage
Ever wondered how banks get money? Well, banks ‘create’ money by giving out loans. When you get a mortgage, which is a loan, you create money for the bank. If you want to lend 300.000 euros from a bank in The Netherlands to buy a house, you’re creating 300.000 euros of assets for that bank. The bank has the assurance that one day, they’re going to get that 300.000 euros back from you, one way or another. And so essentially when you give a bank money, which you’re doing by getting a loan there, you give them power. This bank now has new money which they want to grow even more. And so they invest that money and this is where the importance lies.
When you’re giving a party 300.000 euros, you would want them to spend that money with the same morals as you have, right? If you’re against war or murder, you would not want your money to go to investments in weapons. If you’re against animal cruelty, you wouldn’t want that 300.000 euros invested in slaughterhouses, right? When you go to a bank to create money for them (the biggest amount you’ll ever create for them in your life), you have a choice. Will you choose a sustainable bank or a bank which destroys our world?
Where to get a sustainable mortgage
If you want to get a mortgage, you have a list of options in The Netherlands. So how do you know which one is sustainable? Well, that’s easy. There’s a (Dutch) list on www.eerlijkebankwijzer.nl. Eerlijke Bankwijzer does independent research into the Dutch banks. The list is based on two scores: a policy score (how the banks score on paper) and an in-practice score (what the banks actually invest in). The list on Eerlijke Bankwijzer is an average of the two scores. This is the latest list from 2023 (they do a revision every so many years):
I would say one option is best: The Volksbank, which consists of ASN, SNS and Regiobank. So basically you have three options, because these are three different banks under one concern. The Volksbank could do even better in their policy and get a 10. But every bank in the list below that is a lesser option than The Volksbank. I would say Triodos is good too, but everything below that is not. Especially ING and ABN-AMRO are really bad choices.
It’s never too late for a sustainable mortgage
Buying a house is stressful. I know that, because I recently bought one (and therefore, I am extremely fortunate). Maybe you didn’t think about the importance of a sustainable mortgage when you got your mortgage and you now have a mortgage at ING. I can imagine that, because advisors usually advice to get the lowest interest rates (which is not always the most sustainable option). Even then it’s not too late to switch. Most people who own a house, have enough resources to finance a transit of their mortgage. It costs you money, usually more than 2.000 euros. But I would say it’s worth it. If you’re transitioning, you’re making sure that the money in your mortgage is invested ethically. 300.000 euros away from ING and towards The Volksbank. It’s makes a huuuuge difference.
Alignment with our own behavior
Getting a sustainable mortgage aligns with your own morals. And if your actions don’t align with your morals, something’s wrong. If you’re vegan in daily live, but your mortgage money is invested into slaughterhouses, that doesn’t make sense. If you boycott fast fashion because you’re against child labor, but your mortgage money is invested in businesses which make use of child labor, that doesn’t make sense. And I would say that this invested money makes a bigger negative impact than your personal positive impact can. By having a mortgage at a bank which is not sustainable, you’re erasing all of your personal hard work. I don’t think anybody ever wants that, I think most people are just unaware of what their banks are responsible for.
What banks don’t, and what banks do
When it comes to banks and their investments, I would say it’s most important what they don’t invest in. I would not want them to invest in fur, fossil fuels, weapons, child labor and a lot more. But for me that’s just the bare minimum. With all the money (and therefore power) banks have, we can make the world a better place. They could invest in improving biodiversity, the energy transition, expanding democracies, improving health care and what not. The possibilities are within reach. Why not choose that better future?
In 2023 ING is the biggest bank in the Netherlands (having 41% of the total Dutch market in hands), Rabobank is second (26%) and ABN-AMRO (16%) is third place. The sustainable bank The Volksbank has only 3% of market share in that 2023. It would be amazing if we could turn this around and make The Volksbank the biggest. We can do that, if we want. It starts by focusing on the big personal finances first: the mortgages.
Interest
Lastly I just want to say that a mortgage is a lot bigger than you think. That’s because of the interest you pay. Let’s say you get a 300.000 euros mortgage to finance your house. That’s not 300.000 euros you’re giving to the bank, it’s actually a lot more. A mortgage in The Netherlands usually has a duration of 30 years. And right now in 2025, the average interest rate is around 3,5%. That means that every month you pay 3,5% of interest too, which adds on to the 300.000 euros. Your mortgage is therefore actually around 430.000 euros! Don’t forget that. 300.000 is already a lot, but with interest it’s even more. Think of what that half a million can do.
Yours sincerely,
Romee