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The Many Benefits of Energy-Efficient Homes

Homeownership brings an avalanche of decisions, and all of them seem monumental. After all, we spend most of our time at home, and we see the results of those choices every day. Hardwood or carpet? Blinds or curtains? And with what feels like millions of shades of paint choices, which color will make the guest room feel like a South Pacific island retreat?

Here’s one decision you shouldn’t have to think twice about: adopting energy efficiency. In addition to the energy savings implied in the name, energy-efficient homes can have lower insurance costs and higher resale values while providing a healthier environment for your family. Whether you’re buying or remodeling, energy efficiency benefits both your day-to-day comfort and your financial bottom line!

What Does “Energy-Efficient” Mean?

Of course, the first step to claiming this jackpot is to understand what “energy-efficient” means, and unfortunately there’s no dictionary-perfect definition, because agencies and industries use different terms and standards. To make an informed choice, you’ll need to do a little homework on your options, and that includes learning about the most common programs.

The U.S. Environmental Protection Agency and U.S. Department of Energy promote energy efficiency through the Energy Star program, while the homebuilding industry offers NGBS and LEED certifications, among others. Certification rules vary, but in general, they include high-efficiency features and appliances (double-paned windows, tankless water heaters, high-efficiency HVACs, etc.) and specific design features based on regional conditions.

Show Me the Money!

How much will an energy-efficient home save you on energy bills? Well, as they say in car commercials, “Your mileage may vary.” The efficiency of the products you choose, the number of energy-saving steps you take, and, of course, energy costs and climate factors in your area will all affect the bottom line on your utility bills. (An air conditioner in Phoenix will be running way more often than the exact same model in Minnesota, while any Minnesotan will extol the virtues of a quality heating system.)

But savings on energy bills are only the start! You may also save on property insurance, with some companies offering as much as a 5% premium discount on homes with energy-efficient features. The largest financial bonus, however, comes when you’re ready to sell your home. A National Association of Home Builders survey showed that homebuyers are willing to pay as much as $8,728 extra to save $1,000 a year in utility bills.

Home Improvement = Health Improvement

The benefits extend beyond your bank account, though. You’ll enjoy better health and livability in an energy-efficient home. High-performing appliances and insulation allow you to maintain a comfortable interior climate while using HVAC systems less frequently. This decreases circulation of pollutants and allergens, which can provide some relief to people who suffer from allergies and asthma. More critically, certain building techniques reduce risk of exposure to radon, a naturally occurring, invisible, odorless gas that’s a known carcinogen.

Further, unless your hobby is bug collecting, you probably don’t want to cohabitate with creepy-crawlies. Here the energy-efficient home provides another bonus. The same measures that create energy efficiency (such as effective sealing and caulking around air vents) reduces entry points for pests, while termite shields (where needed) ensure that only humans will enjoy feasting within your kitchen.

Can I Afford Energy Efficiency?

Of course, the bottom line of any home purchase or remodel is cost. This is where Energy-Efficient Mortgages (EEMs) can provide extra flexibility, because they enable borrowers to qualify for larger loan amounts when purchasing or remodeling for energy efficiency. EEMs are available as conventional, FHA, or VHA loans and can be used for a new home or to refinance a mortgage to cover home improvements. Availability varies, but your mortgage loan officer can explain if this is an option for you. Additionally, some cities and states offer rebates, special loans, or tax incentives for energy efficiency.


While energy-efficient homes tend to be more expensive up front, their proven financial and health benefits justify the investment. Want to discuss your financing options for making energy-efficient upgrades? Talk to your mortgage loan officer to learn more!


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