What is a green mortgage and how do I qualify?
Posted on 3rd June 2021
Our expert property solicitors discuss 'green mortgages' and how you can apply.
A relatively new concept that’s emerging in the property market at the moment is a “green mortgage”. This term may be something that you’ve already come across if you have been searching for a good mortgage deal in recent months.
According to James Pagan, head of mortgage products at Nationwide, there is no single definition of what a green mortgage is. However, our local property solicitors have done some research and it appears that the general idea is mortgage lenders will offer a better deal on your mortgage if you are buying a house that is more environmentally friendly. Alternatively, they may offer a good cash back incentive.
How do I know if a property that I am purchasing will qualify for a green mortgage?
Well, most lenders will base a green mortgage on the Energy Performance Certificate for the property that you are purchasing. You can find out more about EPCs in our expert property solicitor’s blog, here.
An EPC is required in order to sell a property or, alternatively, on a new home. An inspection is carried out against the property, and it’s given a rating on a scale of A to G. It will consider facts such as the loft insulation and the boiler efficiency. EPCs are valid for 10 years from date of issue so if you are selling a property with no valid EPC in place, you will need to arrange for one to be carried out. If you are not sure how to do this, speak to your Estate Agents and find out if they can help you to arrange this. If you are not using agents, speak to local property solicitors “near me” to find out how to arrange this.
According to Rightmove, properties with a rating of A or B are generally those offered a green mortgage deal. If the property that you are buying is a new build, a Predicted Energy Assessment should be available, which should indicate how efficient your new home will be..
What sort of green mortgage deals can I get?
The deal that you can get will depend on the lender and what they are offering at the time that you take out the mortgage, however, our property experts have found some current deals, such as:
1. A lower mortgage rate on certain mortgage deals with Barclays
2. A discounted 2 or 5 year fixed rate mortgage and £350 cashback with NatWest
3. A discounted 2 or 5 year fixed rate mortgage with Nationwide (for additional
There may be other deals available so you should always seek expert advice from a mortgage advisor before proceeding with any mortgage.
How can I make my property more energy efficient?
Many things can be done to make your property more energy efficient. You should always seek advice before taking any steps to improve your property, however, Rightmove suggests loft or cavity wall insultation, a new boiler or generating your own energy (for example, through solar panels).
Why does it matter how efficient my house is?
Well, a more efficient home could save you money on your household bills and can also make your home easier to keep warm. In addition, you could help take care of the planet. According to Rightmove, around 14% of the UK’s total emissions are created by housing, which is almost as much as the emissions caused by commercial buildings.
It is foreseeable that green mortgages will become a lot more common in the future, as the Government increases its drive to make houses more eco-friendly. James Pagan comments that “There is a scenario where the energy efficiency of your house affects how much you can borrow and the price that you will pay”. When considering this statement, it really could pay to be thoughtful about what you buy when investing in a property.
How can MG Legal, Solicitors near me, help?
Well, our team may not be able to offer you mortgage advice, but we can help you soar through the legal process of buying your new property. With advice about the house that you are buying and expert legal assistance to ensure that everything is in order with one of the most expensive investments you will make in your life, our team are here to help. Our expert property solicitors are widely knowledgable on all aspects of mortgages, including how a green mortgage could save you money.
You can contact our expert team online, here, or from 9am to 5pm in our Lancaster, Longridge, or Garstang offices for Preston and surrounding areas.
If it is out of these hours, via email to firstname.lastname@example.org for a fixed-fee quote for your property purchase.
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