A ‘green mortgage’ is a mortgage that is favorable to the environment. This means that lenders will plant a certain number of trees per loan; the idea being to offset its carbon footprint. They may also make a donation, on behalf of the borrower, to environmental causes, or the lender can offer funding to green property developments. Green mortgages are sometimes, although not exclusively, offered on houses that are in someway ethical or sustainable. Also most green mortgage lenders will not work with businesses that are known to pollute the environment.
Currently there are only three lenders that offer a full green mortgage package, with less than 20% of mortgage brokers aware that green mortgages even exist. But that’s not to say that you will be paying for the privilege of having a green mortgage, as already lenders are offering competitive rates.
Green mortgages are slowly becoming more popular as the public become more environmentally aware and some commentators expect ethical, sustainable and green mortgages will one day be the common form of home loan.
Home owners are also becoming aware of the benefits of making their home more ethical. Energy, and subsequently money, can be saved by simply having a well insulated roof. Recently it has been announced that the government plans to relax its planning laws top make it easier for home owners to add solar panels to their properties.
Next year will see the compulsory introduction of EPC’s (Energy Performance Certificates). Lenders and energy companies will be able to offer lump sums to home owners to make their properties more energy efficient. This coincides with the introduction of HIP’s (Home Information Packs) that all sellers will have to provide; property will also be given an A-G rating on how energy efficient they are. Homeowners who receive a low energy efficient rating on will be able to act and improve their properties score.