Correct at 30/06/2023
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Green mortgages reward borrowers buying energy efficient properties, or those who make energy saving improvements to their homes, by offering them discounted mortgage rates or cashback.
Growing numbers of lenders offer green mortgages, which can be either fixed or variable rate deals. The right type of green mortgage deal for you will depend on your individual circumstances and whether you need budgeting certainty or are comfortable with fluctuating payments.
The main benefit of green mortgages is that they encourage homeowners to consider buying energy efficient homes, or to improve their current properties, which should help the Government to reach its target of net zero greenhouse gas emissions by 2050.
Incentives provided by green mortgages are usually only available to those buying properties with an Energy Performance Certificate (EPC) rating of B or above, although some may be available to homeowners with a lower C rating.
You may be eligible for a green mortgage if you already own a property which you’ve made more energy efficient by making improvements such as fitting solar panels, insulating your loft, or installing double-glazed windows.
When applying for a green mortgage, you’ll need to provide the same evidence of your income as you would when applying for any other kind of mortgage, so lenders will typically want to see three to six months of payslips, along with bank statements over the same period. They’ll also want to know about any debts you have such as credit cards, personal loans or car finance.
The number of green mortgages available is increasing steadily, which can make it tricky to find the best deal to suit your needs. Here at L&C we have access to over 90 lenders and can search the market to find the best green mortgage for you, completely free of charge.
Even if you qualify for a green mortgage, it’s worth comparing alternative mortgage deals as these may end up being more cost-effective if they offer lower rates or have cheaper arrangement fees.
A green mortgage is a type of mortgage which offers either cashback or a preferential interest rate to borrowers purchasing energy efficient homes, or who make energy-saving improvements to their properties.
EPC stands for Energy Performance Certificate. You must have one by law if you’re selling or letting out a property. The certificate gives a rating for the property’s energy efficiency on a scale of A to G. Properties rated A are the most energy efficient, whereas those rated G are the least energy efficient. Find out more about EPCs in our guide ‘What is an Energy Performance Certificate? .
You can find your property’s EPC by searching for it on the EPC register. If your property doesn’t have an EPC, perhaps because you’ve lived in it for many years, you’ll need to appoint an accredited assessor to visit your property and provide you with a certificate. You can search for an assessor on the EPC register if you live in England, Wales or Northern Ireland. If you live in Scotland, you can search on the Scottish EPC register.
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