Have you heard about green mortgages? And did you know you may be able to save money if you take one out? If you want to find out more about green mortgages, this article explains everything you need to know.
The basics: What are green mortgages?
Generally speaking, green mortgages reward you for buying or owning an energy-efficient house or for making energy efficiency improvements to your home.
How can I find out how energy efficient my house is?
You’ll find this in your Energy Performance Certificate (EPC). This rates your property depending on how energy efficient it is. Homes that are the most energy efficient are rated A; the least energy efficient are rated G. You can check your EPC here. However if your property doesn’t have an EPC or if it has expired you can get a new energy certificate.
How do green mortgages work?
With green mortgages, there are three main types:
- Some lenders offer cheaper rates if your property’s EPC rating is high, such as B or above.
- While other lenders may offer cashback on their standard mortgages if your property meets its energy efficiency criteria
- Finally, some green mortgages offer cheaper rates or cashback if you undertake energy efficiency improvements to your property.
Will green mortgages become more common?
It’s likely that green mortgages will become more common in the years to come. The Government says it wants all UK properties to have an EPC rating of at least C by 2035, “where practical, cost-effective and affordable”. This is part of its wider pledge to reach net zero carbon emissions by 2050.
And green mortgages are a way that lenders are supporting this as they incentivise homeowners to live in energy efficient homes and undertake energy efficiency improvements if their property could benefit from it.
Green mortgages: What are the benefits?
There are a number of benefits of taking out a green mortgage. These include:
- Cheaper rates: If you live in a home with a high energy-efficiency rating and you’re eligible for a green mortgage, it may mean you can get access to lower rates on mortgages than you would otherwise be able to. This means lower monthly mortgage payments – so you’ll feel the benefit in your finances each month. You may be able to get cashback too.
- Reduced energy bills: With the soaring cost of energy, who isn’t trying to save on their heating bills? Another benefit of making your home more energy efficient is that you will spend less on your energy bills.
- Boosting your home’s value: And with the Government’s aim for all properties to have an EPC rating of C or above by 2035, it’s likely that properties with high energy efficiency ratings will become even more desirable to buyers in the future. And this could result in their value increasing. This means that making improvements now may really pay off in the future.
Am I eligible to apply for a green mortgage?
This will depend on your circumstances. This is because if you’re planning to apply for a green mortgage that offers lower rates on homes with high energy efficiency ratings you’ll need to ensure your home means the lender’s criteria. However, you don’t need to worry about doing the legwork on this yourself, our team of expert advisers are here to talk you through your options. And don’t forget to consider green mortgages if you’re remortgaging too.
And if you want to get access to cheaper rates or cashback by undertaking work to improve your home’s energy efficiency, again this is something our team of experts can help you with.
Just bear in mind, like when you take out any mortgage, you’ll still need to meet the standard mortgage lending criteria set by your lender to be accepted.
So if green mortgages are something you’re interested in, please don’t hesitate to get in touch. Our advisers are specialists in green mortgages and are happy to answer all your questions.