Green Mortgages
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Are you considering a new mortgage, and want to make a difference for the environment? If so, a Green Mortgage could be an excellent choice. Not only does it contribute to a greener, more sustainable future, but it can also save you money on interest and improve the energy efficiency of your home.
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
04.09.2023
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
04.09.2023
What is a Green Mortgage?
A green mortgage, also known as an eco mortgage, is a type of loan offered by lenders to encourage homeowners and property buyers to make their homes more energy-efficient. These mortgages typically offer lower interest rates or larger loan amounts to those purchasing an eco-friendly, or ‘green’ home, or those committed to making energy-efficient improvements to their property.
One of the central aspects of a green mortgage is the Energy Performance Certificate (EPC) rating of the property. The EPC assesses and rates the property’s energy efficiency, from A (most efficient) to G (least efficient). Generally, to qualify for a green mortgage, your property must have a high EPC rating, demonstrating a lower environmental impact and increased efficiency.
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How much could you save with a Green Mortgage?
While green mortgages may require initial costs for home improvements to build and enhance your property’s energy efficiency, they often offer preferential interest rates or discounts. This means the money you spend upfront can be offset by long-term savings. Also, improved energy efficiency typically leads to lower energy bills, meaning further savings on a month-to-month basis. It’s a win-win for your wallet and the climate.
Why are we offering a Green Mortgage?
As mortgage lenders, we recognise the crucial role we can play in combatting climate change. By incentivising energy-efficient homes through various discounts, we’re promoting a more sustainable property market and contributing to broader environmental targets. It’s not just about the financial benefits for homeowners; it’s about working together to build a greener future.
What is an Energy Performance Certificate?
An Energy Performance Certificate (EPC) is a document that provides an energy efficiency rating for your property. It includes recommendations on how to build upon this rating and, subsequently, reduce your energy costs. An EPC is a crucial element in qualifying for a green mortgage deal.
Are all properties required to have an EPC?
In the UK, an EPC is generally required whenever a property is built, sold, or rented. However, there are some exceptions. It’s best to check with an accredited broker or estate agent to ensure your property meets the requirements.
Alison Gibson
Ascot Mortgage Expert
Remortgage
Remortgaging is applied when you keep
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
What is a Green Remortgage?
A green remortgage works similarly to a standard green mortgage, but it’s for those who already own their home. By remortgaging to a green mortgage, homeowners can borrow additional funds to carry out energy-efficient improvements or benefit from lower interest rates if their home already meets high energy efficiency standards.
What is a Green Buy to Let Mortgage?
A Green Buy to Let Mortgage is for landlords who want to purchase or remortgage a rental property with a high EPC rating. Like other green mortgages, these offer preferential rates or discounts to incentivise the purchase and maintenance of energy-efficient rental properties.
How to apply for a green mortgage
If you’re interested in applying for a green mortgage, the process is quite straightforward. First, ensure your property has a high EPC rating, typically A – C – if not, consider making improvements to build it up. Once your property qualifies, speak with a mortgage broker who can guide you through the application process, comparing the best green mortgage deals available to you.
At Ascot Mortgages, we’re proud to play our part in promoting a sustainable future and helping homeowners save money. We’re ready to dive deep and find the best green mortgage or remortgage options to suit your individual needs and circumstances. Let us help you make a smart, eco-friendly investment for your future.
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FAQ
The criteria for a green mortgage can vary among lenders, but they generally require the property to have a certain Energy Performance Certificate (EPC) rating or be improved to meet a certain standard as part of the purchase. This is usually an EPC rating of ‘A’ or ‘B’ (and in some cases C), which indicates that the property is highly energy efficient. Some lenders may also have specific criteria around the type of property or its location. As with all mortgages, you’ll need to meet the lender’s standard affordability and creditworthiness criteria.
Yes, you can use a green mortgage for both new and existing properties, as long as they meet the lender’s criteria for energy efficiency. For new properties, this might mean that the property is built to a certain energy-efficient standard. For existing properties, you may need to make energy-saving improvements as part of the purchase, or the property might already need to have a certain EPC rating.
Yes, in principle you can refinance your current mortgage onto a green mortgage, subject to the lender’s criteria. If your property already has a high EPC rating, or you plan to make improvements to enhance its energy efficiency, you may be eligible for a green mortgage. Keep in mind that all mortgages are subject to affordability and credit checks, so you’ll need to meet this criteria as well.
As of my knowledge cutoff in September 2021, green mortgages were mainly designed for residential properties. Some lenders may offer similar products for commercial or investment properties, but this will depend on the lender’s individual policies and the energy efficiency of the property. It’s worth speaking with a mortgage advisor to understand your options if you’re interested in financing a commercial or investment property with a focus on energy efficiency.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £399 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £879 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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