What is a Green Mortgage?

By John Cossons, Mortgage and Protection Designer at Anstee & Co.

Firstly, what is a Green Mortgage, and should I have one?

A green mortgage is meant to increase the appeal of owning a green, or energy-efficient, property. On top of the savings, you’ll make on your energy bills each month. Also, the idea is that lenders give you cashback and/or a better interest rate when you take out a green mortgage.

Tell me more about a Green Mortgage.

Green mortgages generally fall into two categories:

• Those that reward you for living in an energy-efficient home. Here, if the property you’re buying or living in has an EPC (Energy Performance Certificate) rating of A or B, you’ll get cash back or a better interest rate on your mortgage.
• Those that reward you for carrying out ‘green’ home improvements. Green improvements could include replacing single-glazed windows, upgrading your heating system, or installing solar panels, for example. So, typically, lenders will offer you a discounted interest rate or cashback on any money you borrow to upgrade your home’s energy efficiency.

Lenders are willing to offer incentives of this nature because they increasingly see energy-efficient properties as less risky purchases and more likely to hold their value. What’s more, if a homeowner is spending less on their energy bills each month, there’s less of a chance they’ll struggle to meet their mortgage repayments.

What is an Energy Performance Certificate (EPC)?

An energy performance certificate is a document which indicates how energy efficient a property is. They are required whenever a property is built or sold, with certificates lasting for 10 years.

The rating system goes from A to G, with the most energy-efficient homes getting an A rating, and the least getting a G. Between October and December 2021, more than 370,000 new EPC certificates were lodged in England, of which 84% had an energy-efficiency rating A or B. Older properties typically have worse EPC ratings, it is estimated that just 10% of pre-1900 homes have at C rating or better.

Details of a property’s EPC rating are normally 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.

Are Green Mortgages a good deal?

Unfortunately, not yet. The reduction in the interest rate is very small and if there is a cashback it is usually somewhere between £250 and £500. It is commonplace to find a better deal from another lender using their standard mortgage range.

How Anstee & Co can help you with a Green Mortgage.

We are a firm of Independent Mortgage Brokers. This means that the financial advice we provide is unbiased. We look at all the financial options open to you from “the whole of the market”. Our expertise covers all aspects of financial planning including pensions, investments, and estate planning.

To find out more and to see how we can help you why not arrange a meeting today. The initial meeting is at our expense and is without obligation.

Our Head Office is based at Kettering, Northamptonshire-

Additionally, we have advisers who live and make use of meeting rooms in-

• Bedford, Bedfordshire
• Market Harborough, Leicestershire
• Northampton, Thrapston, and Wellingborough in Northamptonshire.

We make full use of video conferencing facilities such as-

• Microsoft Teams
• Facetime

We can also arrange a conference telephone call. So, there is no need to visit an office as all work can be handled remotely. The choice is yours.

If you have any thoughts on this article, ” What is a Green Mortgage?”  then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).

AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.