What is a green mortgage?

You could be eligible for a green mortgage if you buy a home that holds an EPC rating of C or above or want to re-mortgage once you have improved your property’s rating to C or above. 

Of course, it is important to note you would still need to meet all the usual lending criteria for a mortgage. Lenders will still review your credit history and assess your application in line with their affordability assessments, your financial situation and your ability to repay the mortgage. 

Improvements to a current property could also be achieved through home improvements such as upgrading your home’s insulation or installing solar panels.

Green mortgage eligibility criteria does vary between lenders, so it is important to make sure your property and the proposed energy efficiency improvements would qualify before undertaking the work. 

What is an Energy Performance Certificate?

An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years. Check how you could make your home more energy efficient using the Energy Savings Trust’s home energy check. https://energysavingtrust.org.uk/tool/home-energy-efficiency-tool/

EPC ratings are recorded publicly and can usually be found via epcregister.com for properties in England, Wales, and Northern Ireland.

Improving the EPC rating of your home attracts a range of benefits, including:

• reduced carbon footprint
• lower energy bills
• access to potentially lower mortgage rates via green mortgages
• potential for increased property resale price
• potential increased mortgage borrowing amount

What are the pros and cons of a green mortgage?

Advantages of a green mortgage include:

• The peace of mind knowing that your property is helping to reduce your family’s carbon footprint.
• Your property is potentially holding or increasing its value more quickly than others on account of its energy efficiency rating.
• The potential for you to be eligible for enhanced mortgage deals based on the property’s energy efficiency.
• The re-saleability of your property. Your property may be more appealing to buyers who are keen to keep their energy costs down therefore looking for property with a high EPC rating.

Potential disadvantages of a green mortgage include:

• The availability of green mortgages is limited with only some lenders offering incentivised green deals.
• The improvements required to make your property eligible may be an expensive upfront cost.
• There may be lenders offering lower rates on non-green mortgages. It is important that your adviser is whole of market and can compare the ‘green’ deals to the offering from all lenders in the market.

Should I consider a Green Mortgage?

The satisfaction of knowing that you are doing your part for the environment whilst also receiving the benefit of a potential lower interest rate to reward you means a Green mortgage is certainly worth considering.

Plus, with the rising cost of living and energy prices, the greener your home, the more opportunity to benefit from the savings from reduced energy bills. 

Providing that any energy improvements that you are considering for your home are affordable and the mortgage deal you consider is suitable for your finances, green mortgages are well worth considering.

Be sure to visit an Independent and whole of market mortgage adviser to compare against standard mortgage offerings first to ensure you are considering all options to get a suitable deal.   

You can find out more information about the Energy performance of your home and how to improve this below:

Get in touch

If you’re looking for an adviser that has the planet in mind and can offer a whole of market comparison for a suitable mortgage deal to suit your property and circumstances, please contact us on 0800 233 5599.

Please click here to read our blog about the importance of using a mortgage adviser.

Your home may be repossessed if you do not keep up with the repayments on your mortgage.