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Nationwide green borrowing

ended 15. May 2023

Nationwide today announced that from 1 June, it will be updating its Green Additional Borrowing range to offer 0% products for existing Nationwide mortgage members (full details available >> here <<. It says: “This is the first time we have offered 0% mortgage products to support greener homes, helping your clients make their homes more energy efficient.” UK newswire, Newspage, sought the views of brokers, below.

12 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
This is a great idea in principle, so well done Nationwide, but more needs to be done. There are some significant limitations on this product such as the maximum loan being offered at £15,000. Most 'green' improvements that make a difference are going to cost considerably more than this, so I'm not sure that it's going to be such a popular product. Furthermore, whilst offering interest-free loans for a period of 2 or 5 years is great for the green agenda, borrowers need to be aware of the fact that the rate will jump to the lender's standard rate after the interest-free period ends. As with all these new and innovative schemes, the devil is in the detail, and borrowers should seek independent advice to understand those finer details.
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Samuel Ewen
Managing Director at Rosehill Financial Services
It's good to see that Nationwide are helping homeowners get more energy-efficient, but to make a real difference you might need more than £15,000, which is currently the maximum loan that Nationwide are offering for this arrangement. That said, it's better than nothing. It'd be good to see this type of product available with The Mortgage Works, too, to help landlords. Clients need to consider whether they'll likely keep this loan for longer than the initial 2 to 5 years. If so, they'll start paying interest on the loan, so it could work out much more expensive overall.
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Rohit Kohli
Director at The Mortgage Stop
Nationwide's decision to offer 0% products as part of its Green Additional Borrowing range represents a significant step forward in the mortgage and property industry. It's encouraging to see a lender that's actively working towards distinguishing its green products from standard offerings. This move by Nationwide, which is a first in our sector, is quite refreshing. It's a clear commitment to supporting the development of more energy-efficient homes. The new offerings – with 2- and 5-year fixed term options, loan sizes from £5,000 to £15,000, and up to 90% LTV – provide an opportunity for homeowners to make all-important green improvements. In light of this, I hope that other lenders will take note and start to innovate similarly. As the next step, it would be advantageous to see standard mortgages and green mortgages bundled together for clients purchasing properties that require improvements.
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Justin Moy
Managing Director at EHF Mortgages
This is an excellent opportunity for Nationwide customers to borrow for any work that will improve the EPC rating, without any interest costs. It's arguably the best green mortgage solution from one of the High Street lenders to support the improvement in property efficiency. You just need to watch the rate, as it will jump from 0% to the lender's SVR in either two or five years' time.
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Nicola Schutrups
Managing Director at The Mortgage Hut / William James Wealth Management
We've seen lenders sharpen their focus on EPC ratings and green mortgages which in time will create some challenges for existing homeowners who are looking to remortgage or refinance. This move by Nationwide is a forward-thinking approach for those homeowners who want to improve their energy efficiency, whether that be for remortgage purposes, to reduce energy costs or for some other reason. It would be great to see other lenders follow suit.
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Austyn Johnson
Founder at Mortgages For Actors
This is a great idea, although clearly we will need to know more about the extra criteria. For example, what happens if the EPC on the property is unable to get as high as predicted or expected after the works? However, if this is a suitable product and can be shown to be workable, it's a fantastic and forward-looking step for the mortgage market.
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Gary Bush
Financial Adviser at MortgageShop.com
Nationwide's new 0% mortgage isn't quite what it at first leads you to believe but it's a great start towards a greener UK. Nationwide giving all their existing mortgage borrowers the chance to borrow from £5,000 to £15,000 for green-based home improvements without interest charges for up to five years will make a big difference to the UK's green agenda. The fact that the most important improvements on the lender's list reach far beyond the £15,000 ceiling highlights why more needs to be done in this regard but it's promising. Well done Nationwide.
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Hannah Bashford
Director at Model Financial Solutions
This is a great initiative and will be a good step forward to helping to make homes greener. The amount in some cases will not cover the full cost but will provide an affordable option for part of the funding and will hopefully encourage more people to look at their options. Will they expand this to TMW customers to help with the landlord's obligation to get their properties to an EPC C by 2025? That remains to be seen.
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Jamie Lennox
Director at Dimora Mortgages
With the cost of borrowing being higher than what we've become accustomed to in recent years, this is an excellent offering from Nationwide to help homeowners move to make their homes greener while keeping the cost down as much as possible in the process. Many homeowners put off the sizeable initial expenditure to complete these works, whereas this will allow access to more green options for people without large pots of savings to fund them.
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Amit Patel
Adviser at Trinity Finance
The devil will be in the detail once the product launches. In theory, it's a great concept, however, some of the works permitted may cost far more than £15,000. If this proves to be popular, Nationwide may roll this out to TMW to help landlords achieve an EPC of C or better.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
This is a really postive step. Net zero isn't going anywhere and lenders are simply going to have to be proactive about increasing the average EPC of the properties on their mortgage book sooner rather than later or face real financial impact. I'd expect more lenders to follow in future but well done to Nationwide for doing something about it.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
This is a really innovative take on green financing from Nationwide. Whereas other lenders have offered slightly discounted interest rates, or cash backs for small green improvements, this is a very bold statement of intent from the UK's largest mutual; and a very clever way of showcasing the benefits of their "owned by members" structure. It's going to be interesting to see how other lenders respond, especially other mutuals, as it could give them a really clear differentiation over Banks competing in the same market, or will we see some Banks step up and offer similar deals on a 0% basis and how will that sit with shareholders?