Is There Such a Thing as a Green Mortgage?
3 minute read
On the face of it, a ‘green mortgage’ doesn’t seem to make all that much sense. Is it a completely paperless mortgage? Or perhaps it’s written on recycled paper? In actual fact, green mortgages are those designed specifically for those who want to build or buy an environmentally friendly home. The underlying aim of green mortgages is to benefit the environment, which they can do in a number of ways. Firstly, green mortgages give homebuyers the opportunity to purchase environmentally sustainable homes at a lower rate of interest, giving them more money to implement green measures such as the installation of solar panels or double glazing. Green mortgages can also be offered to buyers who are purchasing properties made from sustainable material. Alternatively, as part of the mortgage deal, the lender might agree to make a donation to an ecological charity on the buyer’s behalf.
The Drive to Reduce Energy Emissions
The housing sector accounts for approximately 25% of all greenhouse gas emissions in the UK. To meet targets of reducing carbon emissions by 80% by 2050, it is essential we start to explore more environmentally friendly ways of powering our homes. Green mortgages, which offer lower interest rates to encourage people to make their homes more energy efficient, could be a key part of this strategy. The cost is currently the biggest barrier to energy efficient home improvements, but by offering mortgages with specific extension to provide the capital to make these changes, it is hoped the number of renovations will increase.
More Detailed Calculations of Energy Costs
The partners of a green mortgage research project called LENDERS are asking homeowners to complete a survey to help them gather key information on homes, their energy ratings and bills. The aim of the survey is to look at ways of moving away from the current estimates of energy costs that take place in the mortgage lending process. Instead, LENDERS want to gather the necessary information to produce detailed affordability calculations for each property. This information will then be fed into the mortgage approval process. The hope is these detailed assessments of energy costs will allow homebuyers to borrow more on their mortgage. Ultimately, this will encourage buyers to look towards more efficient buildings when considering their purchase.
Just Four Minutes of Your Time
The leaders of the LENDERS project are asking homeowners to spare just four minutes of their time to complete the survey. All you need are your recent fuel bills and your Energy Performance Certificate (EPC). However, if these are not available the survey can still be completed. All the information gathered will be treated confidentially and will only be used to inform this project. For more information about green mortgages, please get in touch with the Just Mortgage Brokers team today.