Looking for a comment today on green mortgages

Journalist: Rebecca Goodman, Freelance

ended 18. April 2022

Hi,

I'm looking for a very short comment today on how to pick a green mortgage. Where should people start, how can they find out the green credentials of a mortgage or provider, are these mortgages more expensive and do they involve any extra paperwork.

This is for an article for The Independent on the 10 ways to be more green with your money,

Thanks,

Rebecca

4 responses from the Newspage community

The best way to seek out a green mortgage is to use a mortgage broker as they have transparency over the vast amount of mortgages available. However green mortgages might not be exactly as expected. Often the term 'green' refers to the high level of energy efficiency the subject property must have in order to qualify, rather than an eco-friendly standard the mortgage lender complies with. For instance, borrowers might find it almost impossible to find a carbon neutral mortgage lender. All considered, green mortgages can offer decent savings in comparison to their non-green counterparts for some borrowers. Usually newer properties that already conform to high efficiency standards are best placed to take advance of these offers, which can include reductions interest rate, lowers fees, and even cashback on completion.
getting to grips with "Green" mortgages can make you see red. Most "green" products offer a cash-back or rate advantage for properties that are A or B energy rated and most properties in the UK are C and D. There are some lenders, like Coventry who do offer an incentive to improve a properties energy rating under their "Green Together" incentive. To get a really, truly green mortgage the Ecology Building Society is a good starting point with interest rate pricing based upon the energy performance and ongoing discounts for improvements. Whilst they are more know in intermediary circles for their self-build range their green credentials are hard to beat as they have been at long before Greta Thunberg was an environmental spark in her parents eye. Taking this purest approach for existing stock will be for those who value their ethical stance above the cost to their pocket because no matter how noble Ecology BS's intentions are they simply do not have the funding to compete with the main banks. Mortgage Lenders freely acknowledge that they need to do more in the "Green space" but as yet innovation is still leaving many of them to scratch their heads.
As with any unique mortgage, it is best to seek the advice of a mortgage broker. It is important to find an independent advisor who is able to access mortgage deals from the whole of market in order to access a ‘green deal’. The available ‘Green deals’ are usually for properties with an EPC rating of A-C. For a truly green eco friendly mortgage these are few and far between, but a mortgage broker will be able to identify the lenders who can provide this and access this for you.
A great starting point would be to check the Green Mortgage Hub – launched by the Green Finance Institute at the end of 2021 – as it currently lists 36 products which offer financial incentives to owners or purchasers of energy efficient properties. There' s no additional paperwork involved with applying for most of these products, as they are generally tied to your property's current EPC rating.