Simply put, green mortgages are designed to encourage people to buy energy-efficient homes or enhance the energy efficiency of their existing properties.
For buyers who can demonstrate their property hits certain environment criteria, green mortgages can offer several benefits such as reduced interest rates, cashback and other perks for financing eco-friendly homes.
Lenders offer these perks to encourage sustainable practices, support government environmental policies and because energy-efficient properties are considered lower-risk investments.
How do green mortgages work?
Lenders favour energy-efficient properties because they are more likely to retain market value over time, and lower energy bills can help borrowers manage their mortgage repayments more easily.
Additionally, the government aims to achieve net-zero carbon emissions by 2050 and wants most UK households to have an Energy Performance Certificate (EPC) rating of C or higher by 2035 (1).
To support these objectives, many lenders offer incentives for purchasing properties with an EPC rating of A or B, helping to reduce household carbon emissions, which currently account for around 20% of the nation’s total (2).
The main idea behind green mortgages is that borrowers taking out financing for an energy-efficient property can benefit from a cheaper rate on their mortgage.
Ways to improve your EPC
If you want to improve your property’s EPC rating, you’ll need to make changes that boost its energy efficiency.
Before you start, it’s a good idea to know your current property’s EPC rating, which you can find here: https://www.gov.uk/find-energy-certificate.
Below are some practical steps you can take to achieve this:
- Upgrade to LED light bulbs
- Insulate the walls and roof
- Install double or triple-glazed windows
- Replace the boiler with a more efficient model
- Install underfloor heating
- Set up a smart meter
- Invest in renewable energy sources
- Get support from your energy supplier
If you’d like to have your property reassessed, EPCs are issued by an accredited assessor who visits the property to perform an inspection.
You can find a local assessor online and book an assessment by clicking here.
Find out about the green products available.
If you have a high EPC rating (B or above) and you’re interested in finding out more about green mortgages, it could be a good time to discuss green mortgages with a qualified broker.
At Your Mortgage People, we go beyond other experts in the mortgage industry by providing unparalleled help, guidance and support throughout the journey – often finding solutions that others can’t.
When you reach out to us, you’re assigned a personal Mortgage Advisor who will take sole responsibility for your entire journey with us.
To learn more about whether a green mortgage could lower your monthly expenditure, arrange a call back via our contact page or call us on 01489 346624.
(1) https://www.mortgageadvicebureau.com/green-hub/articles/what-s-a-green-mortgage/
(2) https://www.mortgageadvicebureau.com/green-hub/articles/what-s-a-green-mortgage/
