Abstract:
This work introduces the theme of “green finance”, and in particular it concentrates on “green
mortgages”. The analysis focuses on the relationship between probability of default of borrowers and the
energy efficiency of green homes. The idea behind is that more energy efficiency will bring to lower utility
costs and as consequence lower probability of default of borrowers, improving their probability to repay
the loan, since more disposable income will be available, and at the same time, enhancing the value of
properties with the result of decreasing the loss of banks if default will happen. After providing a general
definition of green finance and introducing the market of mortgages and houses, especially in Italy, the
work will be focused on the empirical side, explaining how the sample data is created, the methodologies
used, and the results obtained.
