What Are Green Mortgages and Why Are They Growing in Popularity?
- Adrian Collins
- Aug 15
- 3 min read
Updated: 4 days ago
More people in the UK are now looking to live in homes that are better for the environment. They not only want to save money on energy bills but are also keen ‘do their bit’ to minimise the impact on the wider climate. One way to do this is by choosing an eco-friendly home. There are now special green mortgages that make it easier and cheaper to buy or improve green homes. Our latest article explains what they are, why green mortgages are becoming more popular and how to get one.
What Are Green Mortgages?
Green mortgages are special loans from banks and building societies. They often give you better interest rates or perks if your home is energy-efficient. This means the house uses less energy, saves you money, and is better for the environment.
Why Choose a Green Home?
Living in an eco-friendly home has many benefits, such as:
Saving on your bills: These homes use less energy, cutting down your bills.
Helping the Environment: You reduce your carbon footprint.
Being a Good Investment: Green homes can be worth more and are prepared for future rules & regulations around energy efficiency.
Why Are Green Homes Becoming More Popular?
More builders and homeowners are now focusing on making homes that are better for our planet. Newer homes often have high energy ratings and feature solar panels, better insulation, and eco-friendly materials. This makes them more attractive and affordable to run.
What Green 'Mortgage' Options Are There?
Some of the loan options for qualifying green properties include:
Cheaper Mortgages for Purchasing an Energy-Efficient Home: If the property has a high energy rating you are likely to qualify for some special mortgage deals which are exclusive to green properties.
Loans for Home Improvements: To add insulation, solar panels, or energy-saving systems to your current home, many lenders are now offering additional loans at preferential rates.
Cashback Option: Lenders occasionally offer special schemes. For example, currently, you can get a £10,000 cashback to improve your home's energy efficiency, without increasing your mortgage balance. (a higher interest rate will apply)
Future Regulations and Incentives
New rules are making it necessary for homes to meet certain energy standards. The government plans to:
Offer incentives for homes that meet high energy standards.
Phase out support for less efficient homes, encouraging property owners to upgrade.
How Can These Support Programs Help You?
If you're looking to buy a green home or make some upgrades to your current home:
You might qualify for grants or financial assistance that reduce the upfront costs.
These schemes can make energy-efficient homes more affordable and accessible.
They also help future proof your property against tightening regulations and increasing energy costs.
How Can I Get A Green Mortgage?
To qualify, your home usually needs to have a healthy energy performance rating, you can check on the government website to see if your home meets the necessary rating. You might need proof of energy-saving features such as solar panels. Talking to a mortgage broker can help you find the best options for your situation.
Final Thoughts
Living in a green home is not only good for the planet but your wallet too. Having an eco-friendly home will open doors to better mortgage deals. If you're interested in finding out more, talk to a mortgage expert to see how you can benefit from green living.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Published by Adrian Collins, Founder of Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.
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