Green Mortgages
Our natural environment is a treasure; going green is more advantageous than just protecting the Earth. Optimising our habitat and conserving resources ensures cleaner living conditions for future generations. This approach allows us to live life to its fullest while preserving our planet’s beauty.
The world is changing for the better. We are more environmentally conscious than ever. Environmental awareness has been continuously increasing in many places in the second half of the last century, whether governmental-wise or public-wise. We are all aware of the efforts to reduce and combat the use of fossil fuel, biofuel etc. Some lenders have launched a product, “green mortgage.”
A zero-carbon home emits no carbon dioxide into the atmosphere during its occupancy. It could include using renewable energy to power all appliances, relying heavily on solar panels, or combining both. It also consists of an efficient insulation system to reduce energy use.
It is encouraging to see lenders involved in this initiative and taking steps towards a greener future.
Fit for the future: the push for zero-carbon homes.
Thanks to the availability of green mortgages, eco-conscious homeowners can now do their part to help the planet, one mortgage payment at a time. Green mortgages often offer features like lower interest rates and fewer fees. This means you can save money while supporting renewable energy projects and protecting the environment.
What is a green mortgage?
A green mortgage makes owning a sustainable property even more attractive. Not only can you save money each month on energy bills, but lenders will incentivise your decision with cashback and/or lower interest rates when you take out this type of loan for an eco-friendly home.
Five years ago, finding a conventional lender that would offer favourable rates for an Energy Performance Certificate (EPC) was nearly impossible – but now some of the biggest banks on the street are providing their own “green mortgages” based precisely on this criterion.
What do you need to do to qualify for a green mortgage?
Green mortgages generally fall into two categories:
- Rewarded for living in an energy-efficient home: If you are a homebuyer or remortgager looking for a green mortgage, search no further. When the property you purchase or reside in has an EPC rating of A or B, you will receive cashback and be eligible for more favourable interest rates on your mortgage. So take advantage of this fantastic opportunity to make eco-friendly decisions while enjoying money savings benefits.
- Rewarded for carrying out ‘green’ home improvements: Incorporating green enhancements into your home is an excellent way to reduce energy costs. Options could include installing double-paned windows, adding solar panels, or upgrading your heating system with endless choices.
Lenders are willing to offer incentives of this nature because they increasingly see energy-efficient properties in this era of combating climate change as less risky purchases and more likely to hold their value. Plus, if a homeowner spends less on their monthly energy bills, there’s less chance they’ll struggle to repay their mortgage.
Energy Performance Certificate
An energy performance certificate (EPC) is an essential document showcasing a property’s energy consumption and use efficiency. Obtaining an EPC before any building, purchase, or sale must occur has become the standard practice.
These certificates remain valid for ten years. Details of a property’s EPC rating are typically available online. Use the Gov. uk database if the property you’re researching is in England, Wales or Northern Ireland, and the Scottish Register for properties in Scotland.
The pros and cons of green mortgages
While green mortgages come with various enticing benefits, there are also several drawbacks to be aware of before deciding.
Pros:
- Investing in a mortgage with reduced interest rates can help you to save money on your repayments.
- Boost your savings and reduce energy consumption with an eco-friendly property.
- Unlock financial rewards with potential cashback from your lender!
- A more negligible environmental impact.
Cons:
- Although they may appear more financially advantageous, green mortgage rates sometimes cost less than traditional lenders’ standard rates.
- With few lenders offering green mortgages, your selection is limited.
- Making the necessary changes to upgrade a property’s energy performance certificate (EPC) rating from A or B could prove costly.
In conclusion, although these special offers may be enticing, they aren’t usually the most cost-effective mortgage option. However, if you want to reduce your carbon footprint while making a wise financial decision, adding a green element to your property search could be beneficial. Unfortunately, with few lenders offering green mortgages, your selection is limited, so discuss your best option with a Connect mortgage adviser.
