Why should I apply for a green mortgage?
We've already covered some of the reasons, but there are many other benefits to a green mortgage; the lenders need to give you a reason to apply for one after all. So, then, what are they?
- Lower interest rates – less interest means lower monthly repayments. Put simply, you save more money.
- Lower energy bills – less money going out on your utilities. Yep, same again; you’ll save more money.
- Higher property value – eco-friendly homes are highly sought after, and resultantly, more expensive. But making any eco-friendly renovations can increase your property’s value by thousands.
Why do green mortgages exist?
Lenders are offering green mortgages off the back of the UK Government’s pledge to reach net zero carbon emissions by 2050. The UK has signed up to the Paris Agreement to reduce global warming to 1.5°c, and reduce greenhouse gas emissions, to achieve a climate neutral planet.
In order to achieve this, the Government is expecting all properties in the UK to have an Energy Performance Certificate (EPC) rating of at least ‘C’ by 2035. All properties have an Energy Performance Certificate ranging from ‘A’ to ‘G’. ‘A’ being the most energy efficient, whilst ‘G’ is the least.
In a nutshell, green mortgages are:
- a way for lenders to support the Government’s pledge to become carbon neutral
- incentivise homeowners to live in energy efficient homes through discounted rates or cashback
Can I apply for a green mortgage?
If you’d like to apply for a green mortgage product, your home will need an EPC rating of ‘A’ or ‘B’ to be eligible. You can even apply for a green mortgage if you begin to make improvements and renovations to your home to make it more energy efficient.
You can also remortgage on to a green mortgage if your property has a high enough EPC rating.
You will, of course, still need to meet the standard mortgage lending criteria set by your lender.
Are you unsure what your EPC rating is? You can check your property’s EPC rating here.
