Green Mortgages Explained: What is a Green Mortgage?

You could get a cheaper rate on your mortgage or cashback if you take one out. But how do you know if you’re eligible to get a green mortgage?

We’ve put together this article to explain everything you need to know.

So what are “green mortgages”?.

Broadly speaking, green mortgages reward you for buying or owning an energy efficient home or for making energy-efficiency improvements to you property.

Green mortgages have been around for several years, however they have started to become more common.

In fact research by Defaqto shows there are now 26 green mortgages on the market.

This information will be on your Energy Performance Certificate (EPC); the most energy efficient homes are rated A and the least energy efficient homes are rated G. To find your EPC, click here and if your property doesn’t have an EPC or if it has expired you can get a new one.

There are three main types of green mortgages:

• Lower rates: Some lenders offer cheaper rates on energy-efficient homes. Each lender will have its own criteria on energy efficiency that you’ll need to meet, such as your home having an EPC rating of B or above.
• Cashback deals: While other lenders offer cashback on their standard range of mortgages to people who buy energy efficient homes. In these cases, the property will need to meet the lender’s energy efficiency criteria to be eligiblefor the cashback.
• Rewards for carrying out energy efficiency improvements: Lastly, with these green mortgages, you’ll get a cheaper rate or cashback if you make energy efficiency improvements to your home.

• There are several factors that may make green mortgages an attractive option for homeowners. These include:
• Saving money: If being eligible for a green mortgage means you can get a lower interest rate than you would otherwise have been able to get you will save money each month on your mortgage payments. You may also be able to get cashback.
• Lower energy bills: Plus, if your home has a high energy efficiency rating you’ll spend less on your energy bills too. This means you could save even more money. So with energy bills rocketing, this could have a big impact on your finances.
• Boost your property’s value: Energy efficient homes are attractive to buyers. So if you make energy efficiency improvements you could see your home’s value increase.
• Sustainability: Many homeowners are increasingly interested in sustainability so for some, knowing they’re making a positive impact on the environment by making their homes more energy efficient is important.

So you might be asking, “why do we have green mortgages” The government has pledged to reach net zero emissions by 2050. And as part of its plan to achieve this, the Government wants as many homes as possible to be EPC band C or above by