What is a green mortgage?
A green mortgage is a financial instrument designed to enhance the desirability of owning an environmentally friendly property. In addition to the energy bill savings that come with an energy efficient home, lenders sweeten the deal by offering cashback or improved interest rates when you opt for a green mortgage. While this may have seemed like a distant dream five years ago, today, several mainstream banks are actively promoting their versions of green mortgages.
Qualifying for a green mortgage
If the property you’re buying or living in boasts an energy performance certificate (EPC) rating of A or B, you may become eligible for cashback or a more favourable interest rate on your mortgage. This type of green mortgage is available to both homebuyers and, in some instances, those looking to remortgage.
Green characteristics of the mortgage itself
Surprisingly, there’s not much that’s inherently “green” about the mortgage itself. Current research indicates that the eco-friendliness of these mortgages lies primarily in the property you’re moving into or the green home improvements you’re making to your existing property. Remember, the true “green” benefit of these mortgages lies in the potential for you to inhabit an energy efficient home, contributing not only to the environment but also to long term cost savings on energy bills.
Applying for a green mortgage
Applying for a green mortgage is a straightforward process, quite like applying for a standard residential mortgage. The keys steps include:
Research and compare:
- Explore different green mortgage offerings from various lenders, with support from your financial advisor.
- Compare interest rates, cashback incentives, and terms to find the most suitable option for your needs.
Check your EPC rating:
- Ensure the property you’re interested in has a high EPC rating (A or B) to qualify for the benefits associated with green mortgages.
Regular mortgage application process:
- The application process for a green mortgage is similar to that of a traditional mortgage.
- Focus on securing the best overall deal, considering the financial benefits.
Joining the green mortgage trend not only aligns with aspirations for a sustainable lifestyle but also presents a potential opportunity to enjoy financial advantages. By choosing an energy efficient Willan home, you not only contribute to a healthier planet but also position yourself to save on energy bills on the long run. As you embark on your homeownership journey, consider the green mortgage option as a powerful tool to which could make a positive impact on your finances.