The world is going green. This is in aid of helping reduce global warming from all the damage that fossil fuels are making to the environment. To help reduce the impact we have, there’s been an increase in the number of renewable energy sources and the vehicles moving from petrol and diesel to electric. Every aspect is being looked at.
Now it’s mortgage lenders’ turn to help encourage people to help the environment by purchasing more eco-friendly houses.
What is a green mortgage?
A green mortgage is just like a normal mortgage, but it comes with an added benefit. Several lenders are starting to introduce reduced rates to reward people for energy-efficient houses.
This could be lower interest rates on your mortgage or incentives when it comes to making your house more energy-efficient.
It doesn’t take much imagination to consider the energy that gets consumed in a house; heating and appliances being the lead cause of a lot of household energy consumption.
This is why these incentives have been put in, so house buyers can have this in the front of their minds as they consider their options, to help cut down energy consumption and in turn, global warming.
How do green mortgages work?
There are different ways you can benefit from a green mortgage. If you are buying a house that has already been built with higher energy efficiency rates, then you could get cheaper rates or cashback.
The Energy Performance Certificate is the official rating given to a house for its energy consumption. This is based on how much energy is consumed and gives you an estimate of energy costs and its energy performance.
Old houses have an average EPC rating of D which indicates a house that is not very efficient. Most new houses tend to have an A rating, and it is these types of property that lenders are allowing green mortgages on.
NatWest and Virgin Money have green mortgages that offer you cashback when you buy a house with an EPC rating of A or B.
Nationwide is helping buyers with their green home improvements by lending more money that will go to home improvements, such as installing wall insulation or double glazing.
Only a select few banks currently offer green mortgages, but with the shift in the mindset of the population, it won’t be long before you see more mortgage providers offering more incentives to help make a change to global warming.
Should you apply?
If you are looking at buying an old house, then the help with your home improvement is certainly something you should consider. Getting help to reduce your energy consumption will, in the long run, help the environment and also reduce the running cost of your house.
As with all mortgages, your credit history has an impact on whether you would be successful in being lent the money for a mortgage. It can be difficult if you have bad credit. According to 1st UK Money, you should consider a company that specializes in assisting people with bad credit before you ask your bank for a green mortgage.