AIB has become the latest lender here to offer a mortgage with a lower rate to customers whose houses are more energy efficient.

The five year fixed rate green mortgage will be available to the bank's new and existing mortgage holders whose homes have a building energy rating of between A1 and B3.

The rate charged on the loan will be 2.5% for 5 years, which is 0.35% lower than a similar AIB mortgage on a property that doesn’t meet the energy efficiency requirements.

According to the bank, on a mortgage of €300,000 over 25 years, this would lead to repayments of €1,210.56 per month, compared to repayments of €1,258.47 per month for a standard five year fixed rate.

The product is only available for private dwelling houses and not investment or commercial properties.

"We recognise that supports are needed to help change societal behaviour, and we will not be found wanting in helping our customers adapt and transition," said Colin Hunt, AIB CEO.

"The green mortgage is the latest in a series of propositions in which AIB is backing climate action."

AIB’s move follows a similar one by Bank of Ireland in July.

It announced a "green loans" scheme to offer lower rate mortgages to those buying an A-rated home or upgrading its energy rating.

The scheme is also available to companies planning to improve their energy efficiency.

Other banks also offer fixed rate products over shorter terms that are lower than AIB’s green offering.