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Green Mortgages Explained - Could Going Green save you money in the cost of living crisis?

Updated: Apr 6, 2023


With the rising cost of living and energy bills costing more, everyone is keeping a closer eye on their pockets. Could making your home more ‘green’ save you money?

In this blog we explore what it means to go green!


Green Mortgages Explained

What is a green mortgage?

A green mortgage is a type of mortgage meant to increase the appeal of owning a ‘green’ property. The idea is that lenders give you cashback and/or a better interest rate when you take out a green mortgage on an energy-efficient property.


Green mortgages generally fall into two categories:


Green mortgages that reward you for living in an energy-efficient home.

If the property you are looking to mortgage has an EPC rating of A, B or with some lenders, a band C, you could be able to get cashback or a better interest rate on your mortgage. This type of green mortgage is available to homebuyers and some lenders will offer these when remortgaging.


Green mortgages that reward you for making 'green' home improvements.

Green home improvements are home improvements that help to increase the energy efficiency of the property. These could range from installing solar panels to replacing single-glazed windows with double or triple glazing. Typically, lenders will offer you a discounted interest rate or cashback on any money you borrow to upgrade your home's energy efficiency.


EPC Ratings Explained

What is an EPC Rating?

First introduced in 2007, an EPC (Energy Performance Certificate) rating is used in England and Wales to determine a property's energy efficiency on a scale of A-G, with A being the most efficient and G the least.


A low EPC rating can result in lower energy bills as well as reducing your carbon footprint, which makes the property more attractive to potential tenants and buyers. Landlords are responsible for providing tenants with an EPC rating and have to get a new rating every 10 years.


Currently, you need an EPC rating of at least an E to be able to rent out your property. This will change at the beginning in 2025, any newly rented properties will need a rating of at least a C, and any existing tenancies will have until 2028 to improve the properties EPC rating to the same.


What home improvement will make my home more ‘Green’?

When making home improvements we all have a long list of desires, a new bathroom, open plan living space, a loft conversion. However, not all improvements will make your home more energy efficient, so what home improvements will help with efficiency?


Here are some examples:

  • Update lighting to energy efficient LED bulbs

  • Replace your boiler jacket

  • Upgrade insulation in your loft

  • Insulate walls and underfloor space

  • Upgrade window to double/triple glazing

  • Install solar panels

  • Replace an old boiler with a new one


Summary

Going green can save you money on your monthly energy bills, so if you can afford to make those home improvements or if you are house searching and want to buy a green property then you may be better on down the line.

If you would like to speak to a broker about green mortgages or you are a landlord who has questions about EPC ratings then don't hesitate to get in contact.


01702864848




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