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Energy efficiency is increasingly high on the agenda of many homeowners, not just to lessen their home’s impact on the environment, but to also significantly reduce their energy consumption (and therefore their monthly bills).
But retrofitting an existing home to be more energy efficient can be costly, and you may need to borrow money to finance the project. This is where green mortgages come in.
What is a Green Mortgage?
Whilst there is no universal definition of a green mortgage, most industry experts would agree that money borrowed against the value of your home, for the purposes of making your home more energy efficient, would be the most widely accepted description.
Where Can I Get a Green Mortgage?
Some sectors of the mortgage industry (Ecology Building Society and Saffron Building Society, for example) have developed products for this and can provide homeowners with discounted mortgage deals once they have completed the retrofit and can provide evidence that they have improved the property’s Energy Performance Certificate (EPC) rating.
By comparison, a small selection of lenders can offer discounted mortgage products when purchasing an energy-efficient new build. Barclays Bank is soon to be joined by Nationwide Building Society in offering these types of products.
It can be tough finding a mortgage that best suits your needs, so it is certainly worth seeking the services of a mortgage broker when conducting your research.
Ambitious Targets
The UK Government has set itself a very ambitious target of net-zero greenhouse gas emissions by 2050 and has an aspiration for as many homes as possible to reach EPC Band C by 2035. The challenge is greatest in the owner-occupier sector, which accounts for 63% of the housing stock and where an estimated 17 million homes are below EPC Band C.
The Green Home Finance Innovation Fund was set up to provide funding for the initial development and piloting of green home finance products, which will hopefully follow soon with the successful applications – Lloyds Bank, Monmouthshire Building Society and Home Infrastructure Technology (the latter being a digital platform for the customers of mortgage lenders to use it to search for energy efficiency measures that they would like to install in their homes.)
For every mortgage Cherry Mortgage & Finance (a specialist mortgage broker) arranges, it is planting one tree in schools and nature reserves across the UK, and offsetting one tonne of CO2 through a deforestation project in the Amazon Rainforest.
For more information on securing a mortgage for a renovation, extension, loft conversion or retrofit to improve your home’s energy rating, contact Cherry Mortgage & Finance on 01202 925 365.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
