If you’re looking to take out a new mortgage or are considering your options because your current deal is coming to an end, you may have heard of green home finance or green mortgages.
If you’re considering purchasing a new-build home or are hoping to improve the energy-efficiency of your property, a green mortgage could be worth looking into.
What are green mortgages?
The growing popularity of green mortgage products over recent years is significant, with just four available in 2019 to over 60 as at August 2023, according to the Green Finance Institute.
There are two core types. One is designed for buying or remortgaging energy-efficient homes and is often accessible to those purchasing or remortgaging properties that have Energy Performance Certificate (EPC) ratings of A or B. Lenders may offer slightly lower mortgage rates or cashback incentives.
The other is for green home improvements and is tailored towards homeowners who want to make energy-saving improvements to their property. Typical qualifying improvements include installing solar panels. Lenders might provide a lower rate on the additional money you’re borrowing, or a reduced mortgage rate once the work is finished, or cashback.
It’s worth noting that it’s not the mortgages themselves that are green, but the property the mortgage relates to.
Benefits of green mortgages
Green mortgages can offer a variety of advantages. The first is the financial incentive itself, such as the slightly reduced mortgage rates or cashback.
That said, it’s important to note that shopping around for the most suitable mortgage deal for you and your current financial situation is always prudent. Products change and there is no guarantee that a green deal will be the most beneficial deal for you at the precise moment you are looking for one.
Then there is the fact that living in a more energy-efficient property means lower bills. Reassuring for property owners faced with high energy costs, the peace of mind this can bring is worth its weight in gold.
And if being environmentally friendly is a priority for you, you’ll also be able to enjoy peace of mind from knowing that you’re taking steps to reduce your carbon footprint.
