Have you ever heard of a green mortgage? They’re steadily becoming a popular option for property owners, as many lenders are adding them to their portfolios. If you’re due to remortgage soon and you have an energy efficient home, it’s well worth considering them as a remortgage option. We explore what they are and how they could work for you.
As the UK housing market steps up its efforts to reduce carbon emissions, the ripple effect is being felt throughout the whole housing industry – including the mortgage market.
Step forward the green mortgage – a mortgage that rewards you for either owning an energy efficient home or making improvements to your home to make it “greener”.
Are you eligible for a green mortgage?
If you’re ready to remortgage soon, be aware that you have to fulfil certain criteria to be considered for a green mortgage. First check your property’s energy performance certificate (EPC). If it has an EPC rating of A or B, you may be a prime candidate for a green mortgage.
If your property doesn’t sit in this bracket, you could still make yourself eligible by making some simple improvements or renovations:
- Swap your single glazed windows for double glazed
- Trade your heating system for a more energy-efficient one
- Raise the eco-friendly credentials of your property by installing solar panels
What are the benefits of a green mortgage?
Lower monthly payments
Green mortgage lenders will incentivise their mortgages with lower interest rates because they see an eco-friendly property holding its value in the long run – meaning lower monthly payments for you.
Lower energy bills
As energy bills are soaring, an energy-efficient home can help you keep costs down.
From a lender’s perspective, this makes you a safer bet, as you’ll be more able to pay your mortgage with lower energy bills.
Some green mortgage products are offering cashback incentives of between £250 and £750 for buying energy efficient homes.
Cheaper borrowing rates for improvements
Looking to make home improvements or renovations to make your property greener? Some lenders are offering loans at a reduced interest rate as part of their green mortgage deals.
Increased property value
Your green mortgage could actually help to increase the value of your home, as homes with an A or B EPC rating are considered to be worth more than their less energy-efficient counterparts.
Are there any cons?
While green mortgages seem like an easy win, bear in mind that despite their competitive rates, they’re not always the cheapest option on the market. Everyone’s circumstances are different, which is why we recommend speaking to an expert mortgage adviser. We will be able to review your mortgage options in depth before recommending the right option for you.
Interested in going green? Speak to one of our advisers today.
Whatever remortgaging queries you might have, we can expertly guide you through the whole process. We’ll compare a wide range of mortgage options on your behalf and find a solution that’s completely tailored to your needs.
Ready to plan your next remortgaging steps? Speak to an expert adviser today.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Approved by The Openwork Partnership on 09/05/23