Copy article

Green mortgages

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 10. January 2023

Looking to speak to mortgage brokers about green mortgages and whether they would recommend them to customers. 

  1. Have you processed a green mortgage case recently? What was the reasoning behind it? 
  2. What is current product choice like? Do they offer good value to customers? 
  3. Is consumer awareness of green mortgages growing? 
  4. What do you want to see from lenders? 

5 responses from the Newspage community

Copy all

Copy

Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Look for the best value mortgage deal based on your circumstances. A green mortgage lender may not be offering the cheapest deal on the market. Let your mortgage advisor know your EPC rating and they can normally factor this in when they are searching the market for you rather than targeting only green products. There are options in the market for green products however this is not with every lender right now! With the rise in energy costs, being aware of your EPC rating may help you to make changes to bring some of your bills down and even your mortgage rate!
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
I think the green mortgage offering has a long way to go before it becomes a mainstream feature of the mortgage market. In principle, the idea behind it is a good one, and we all have a vested interest in protecting the environment, but the pricing differential between green and normal products is insignificant. For these products to become more popular lenders need to be more creative and innovative, offering greater pricing differences along with other incentives such as zero or significantly reduced arrangement fees, and perhaps more importantly significantly improved affordability calculations. I have not sold one green mortgage to date, and not one of my clients has requested information on them so much more needs to be done as an industry to improve knowledge of these products.
Copy

Rhys Schofield
Brand Director at Peak Mortgages and Protection
There was a growing head of steam when it came to green mortgages before the mortgage world turned upside down in September but now sanity is prevailing and rates don't change every minute, exciting (to us boring brokers) things have been happening. Barclays for example stole the show recently with a green mortgage offering a hefty cashback to eligible customers. I'd love to see more lenders coming to the table with useful lump sums of cash on the table for people to make their homes greener and bills more affordable.
Copy

Austyn Johnson
Founder at Mortgages For Actors
Often, the rate or fees are slightly better on Green Mortgages. I have recommended and carried out a few of these, but only really due to the rate being better for the client at the time.
Lenders need to start changing affordability around green properties as the monthly bills will end up being lower.
Copy

Paul Elliott
Managing Director at Propp
The 'green mortgage' format is pretty generic across the board with a combination of lower rates and/or lower set-up costs. They offer good value when compared to the options for non-green products when you look at the like-for-like cost. However, the savings do not necessarily reflect the investment that the borrower had to make to improve the property’s EPC to access the products.

We need to see more innovative ways to support the retrofit of properties to improve their energy efficiency. Rewarding stock that is already efficient doesn’t address the major issue - the huge percentage of the UK housing stock that is not energy efficient. Some lenders have started to offer further advances specifically for energy efficiency improvements, but this needs to be adopted by the industry if we're to meet the EPC challenge head-on.