What is a green mortgage?
By choosing an energy efficient home you’ll not only reduce your monthly utility costs and be more appealing to potential buyers, but you could also secure a better rate on your mortgage by applying for a ‘green’ mortgage.
These are relatively new products and are becoming increasingly popular with lenders including high-street banks. For example, Barclays has a Green Home Mortgage range that enables those purchasing a new-build property with an energy efficiency rating of A or B to get a lower mortgage rate. In addition, Nationwide has a green mortgage range with preferential rates to those buying a new-build property that has an A-rated Energy Performance Certificate (EPC).
A green mortgage could be a great option when looking for the lowest mortgage rate especially if you have a smaller deposit. Although this type of mortgage restricts the type of house a buyer can purchase with this type of mortgage often only available on new-builds that have an energy efficiency rating of B or above.
If you are looking to purchase a property with just a 10% deposit or less you may still struggle to obtain lending, even if it’s a green mortgage, in today’s climate. If you are considering a green mortgage, it’s important to talk to a mortgage broker who can assess if this is the right product for you.
Green mortgages look to grow in popularity over the coming years as consumers and the Government become increasingly aware of the negative impact energy consumption is having on the environment and the importance of reducing emissions. There could well be even more products such as this available to reward those who are living greener, more eco-friendly lifestyles.
Improving your efficiency rating
If you want to live in a highly energy efficient home the advice is to buy new. These are built to high standards, are well insulated and have energy efficient appliances and heaty systems. At present, all homes that are built, sold or rented must now have an EPC, which gives the property an energy efficiency rating from A or 100, which is the most efficient, to G or 0 which is the least efficient.
Having an energy efficient home can help sell the property, as well as cutting down on your utility bills. There are a number of ways that homeowners can improve the energy efficiency of their home including:
- Installing a new boiler,
- Insulating lofts and cavity walls,
- Fitting double or triple glazing,
- Installing solar panels,
- Hanging thick curtains and buying stick-on insulation for doors.
For more information about EPC visit the Government website.