With sustainability and eco-friendliness becoming a core part of our everyday lives, benefiting from making the right choices for our planet makes a lot of sense. That’s why many mortgage lenders now offer rewards for buying energy-efficient homes, ranging from cashback on completion to lower rates on their mortgage products. These all fall under the green mortgage bracket.
In this piece, we’ll break down everything there is to know about them, from what they are and who is eligible for a green mortgage to whether they can be used to buy a new build home!
What is a green mortgage?
If you’ve been wondering how green mortgages work, they are a special type of mortgage offered by lenders to reward homebuyers for purchasing an energy-efficient house.
How this is then applied depends on the product. Some may pay a one-off sum on completion, while others will lower the interest rate over the initial fixed term or even give you a higher LTV (Loan-to-Value), allowing you to borrow more! They also know that utility bills will be lower, increasing the likeli-hood of borrowers meeting monthly mortgage repayments.
Several lenders might also offer mortgages intended to help someone fund improvements on a house to make it more sustainable, although you won’t have to worry about that with a new build home. Neil Alkins, from the Mortgage Advice Bureau, said:
Green mortgages exist to reward buyers of energy efficient properties, because lenders see these proper-ties as low risk. This means they offer lower interest rates, or cashback on completion, or both, and they can even offer higher levels of borrowing because energy efficient homes are much cheaper to run! Shop around though, because the rewards can vary significantly between lenders.
Green mortgage eligibility: How to get one
While each lender will have their own set of green mortgage eligibility criteria when it comes to offering a customer a certain package, the main one will always be a home’s EPC rating.
If you’re unfamiliar with the term, EPC stands for Energy Performance Certificate, which is a require-ment for every home, as it shows how energy-efficient a property is. This is ranked on a scale of 0-100 and then given a rating between A-G, with A being the gold standard.
Many factors affect an EPC rating, such as boiler type, quality of insulation and the thickness of the glaz-ing on windows.
Alkins added: “Most green mortgage products require a property to have an EPC rating of A or B. New build homes like Anwyl, are built with modern insulation, efficient boilers, and high-quality glazing, so they naturally achieve these top ratings. That means buyers don’t need to invest in upgrades or renovations; they’re eli-gible from day one.”
Green mortgage rates: Are they better?
While most green mortgages rates will likely be lower than their non-green counterparts, that doesn’t necessarily mean they’re the cheapest on the market.
Therefore, it’s highly recommended to shop around to find the product that suits your needs the most.
However, it’s fair to say that you’ll often save money with a green mortgage, at least at first, so they’re definitely worth looking into!
Are Anwyl homes eligible for a green mortgage?
We have some good news for you!
If you’re thinking about getting a green mortgage (after all, who doesn’t like benefiting from doing the right thing?), then you’ll be glad to know that buying an Anwyl home will more than likely make you eligible. That’s because all our new build homes are highly energy-efficient and have an EPC rating of A or B, which tends to be the minimum lenders look for when it comes to their green mortgage packages.
Green mortgages: How can we help?
If you want to learn more about why a green mortgage might be the right choice for you or just generally want more independent financial advice ahead of buying an Anwyl home, we can put you in touch with one of our Homes Advisers today.
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