‘A really good thing’ How Britons could access cheaper mortgage rates – can you?
Martin Lewis provides advice on mortgages in later life
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During an exclusive interview with Express.co.uk, Matt Coulson from Heron Financial said: “One thing that we are seeing is a lot more lenders introducing products on the mortgage side that will be a cheaper rate if the property is more energy efficient. They’re calling them ‘green mortgages’ or ‘eco-mortgages’.”
He added: “It’s all based on the energy efficiency assessment that is made of the property.
“If it’s right up at the top of the energy efficiency level, you could potentially get a cheaper mortgage.
“This is a really good thing; it encourages us all to be more responsible with our homes.”
Every home must have an Energy Performance Certificate (EPC) when it is built, sold, or rented.
This gives the property an energy efficiency rating from A or 100 (most efficient) to G or zero (least efficient) and is valid for 10 years.
Green mortgages can offer more competitive mortgage rates as some lenders discount these as a reward for purchasing an energy efficient home.
Other lenders offer cashback as an incentive.
For example, NatWest offers cheaper rates to people buying energy-efficient homes.
NatWest’s Green Mortgage is available on new-build or existing homes with ratings of A or B.
It is available up to 85 percent loan-to-value and comes with £250 cashback.
Nationwide also do their own deals.
They offer cashback for home improvements.
Their ‘Green Additional Borrowing’ product allows homeowners to apply for an additional £5,000 to £25,000 to make green home improvements at a reduced rate of 0.75 percent.
This deal is available at up to 85 percent loan-to-value.
New-build homes will have a Predicted Energy Assessment (PEA) before they’re finished.
This will give people a predicted energy efficiency rating, which they’ll need to confirm this mortgage.
Mr Coulson continued: “New builds are attractive from that front. The idea that all you have to do is move in and get your furniture.
“It’s not going to be leaking, you don’t have to do a lot of work, you won’t have to immediately get in a plumber or an electrician and things like that. What you’ll find is that a new property will be right up at the top because it’s got the best insulation, the best windows. That whole energy efficiency thing has been completely wrapped up.
“Some clients are benefiting from a cheaper mortgage rate because their home is more energy efficient.”
It’s highly likely that green mortgages will become more mainstream in the next few years.
This is due to consumers and lenders taking a greater interest in climate change and sustainability.
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