We are more and more aware of our impact on the environment. We take care to recycle our plastic bottles and cardboard, we try to buy food with less and less packaging. We can walk and cycle instead of getting in our cars. We appreciate the impact we have when we get on a plane or eat large amounts of meat. But do we ever consider if our largest financial commitment is ‘green’ and environmentally friendly? Ask yourself: can I get a green mortgage?
Lenders are supporting the raising of energy efficiency by offering incentives to borrowers who buy or renovate energy efficient homes. Mortgage borrowers are starting to become more aware of the existence of ‘green’ mortgages.
In April 2021 Nationwide launched its new ‘Green Product’ mortgage range to encourage borrowers to purchase greener homes, and help existing members improve the energy efficiency of their homes. Like many lenders, they understand the growing importance some customers are attaching to this. Green mortgages are also offered by other high Street lenders, including Nat West Bank and Barclays.
What is an EPC?
Your EPC is an Energy Performance Certificate containing information about a property’s energy use and typical energy costs. It also gives recommendations about how to reduce energy use and save money. Your property is given a score from 1 to 92 plus – and the higher the score the better the energy efficiency rating. The score is given following a standard assessment procedure. An accredited Assessor can prepare an EPC for you, and it is valid for 10 years.
The Nationwide will check the EPC Register following completion of a mortgage and issue a ‘Green Reward’ if that property qualifies. The property needs an EPC rating of 86 to 91 (level B on the EPC) to earn a Green Reward cashback of £250. A score above 92 (level A) receives a £500 cashback. These are in addition to any other cashback offer on the chosen green mortgage.
For Nat West, an EPC level of A or B will qualify for a £250 cashback. For Barclays, they offer a slightly lower fixed interest rate on some mortgages instead.
What is the future for Green mortgages?
We believe that the availability of green mortgages will continue to grow, given the pressures for everyone to ‘go green’. The incentives may seem small, but aiming to raise energy efficiency in our homes should be an aim for everyone. Better efficiency means lower energy costs, one of the largest household bills.
Robert will be pleased to discuss your green mortgage options and have up to date information on which lenders can offer green incentives. Please contact us for details.
Sources: Nationwide Building Society, NatWest Bank, Barclays Bank (2021)
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.