Borrowers buying energy efficient homes or renovating properties to boost their environmental credentials can access better deals
2021 has seen a boost in lenders offering special mortgage deals for those who buy environmentally sustainable homes.
There are now 26 green mortgage products available, compared to only a few products available a year ago.
These deals are not new but there has been a notable rise in green mortgages this year, as some big lenders have launched into the eco-friendly mortgage market.
What is a green mortgage?
They are all different depending on the lender and the product, but most green mortgages offer better terms to those who either buy an environmentally friendly home or improve their property to boost its energy efficiency.
Generally, properties with an energy efficiency rating of A or B are eligible, although some lenders offer green mortgages on homes with a rating of C or above.
Mainstream lenders including Barclays, NatWest and RBS are now including green mortgages in their ranges, with rates as low as 1.13%.
Some lenders are also offering incentives such as cashback.
It is encouraging to see more mainstream lenders entering the green mortgage market and offering borrowers more choice.
It can cost a lot to make a property more environmentally sustainable and it is great to see some benefits for those who buy them. Most new homes will be eligible for these deals but older properties that have been renovated to achieve a high energy efficiency, may also fit the criteria.
Anyone buying a property with an energy efficiency rating of A or B, would be wise to consider all their borrowing options to get the right product for them. They should look at all the features, such as the interest rate and introductory deal period, as well as any upfront incentives, to make sure they get the right product for them.