With the COP27 summit last month, the climate conversation is at the forefront of people’s minds once again. Reducing the impact, we have on our planet has become a key priority for homeowners up and down the country as we head towards the point of no return. Lenders are aware of this and want to help you achieve that – while also working towards their own green targets. Green mortgages are one of the key methods you can use to help your day-to-day become greener. We take a look at what green mortgages are and how they can help you to go greener.
In simple terms, a green mortgage rewards you for buying or owning an energy-efficient home. Whether your home is energy efficient at the point of purchase or you make improvements to your home, a green mortgage could reward you for being active in the fight against climate change. Essentially, a green mortgage offers you preferential terms if you can demonstrate that the property you own or are hoping to own meets certain environmental standards. A property with a high energy efficiency rating is likely to qualify for a lower interest rate or cash-back incentive. On top of this, lenders may even increase the maximum loan amount – opening doors to different locations or property types.
According to the Green Finance Institute, UK households account for around 20% of the country’s carbon emissions. This statistic alone demonstrates how everyday homeowners can make a real difference in the effort to reach net zero by 2050.
What can green mortgages do for you?
So, how can a green mortgage benefit you? Well, there are several pros to taking out a green mortgage. Lenders will offer lower interest rates to encourage you to have a more energy efficient home. This means your monthly payments may be less than they otherwise would – helping you to save money and the planet simultaneously. Having a more energy efficient home would also help you keep your energy bills at a more manageable level – a benefit not to be overlooked amid a cost-of-living crisis. A more energy efficient home takes less power to heat and therefore doesn’t cost as much.
As we edge closer to the government’s net zero target, eco-homes are becoming more desirable. As buyers are more frequently valuing the EPC rating of a home as a priority, having a home with a good rating could increase its overall value. Not only are you saving money through having cheaper monthly repayments – but your property’s value could increase.
How can I check my EPC?
If an EPC has been carried out for a property, you can find the certificate on the governments website at : Find an energy certificate – GOV.UK (www.gov.uk). Not only does the certificate give you the rating, but also a full appraisal of where you can improve your rating.
If your home has an EPC rating of A or B, or you’re looking to purchase one that does, a green mortgage could be the product for you. To find out more, speak to your adviser to have any of your questions answered.
