Climate change has created a global landscape that's bordering on irreversible consequences if we don’t do something fast to slow down and practices that are environmentally unfriendly. Every decision we make carries ecological weight. From our grocery purchases to our modes of transport, we're increasingly seeking ways to lighten our carbon footprint on the planet. 

But what about the financial commitments many of us make – our mortgages? Does it have a role to play when it comes to being environmentally friendly? Read on, we'll look at some ways on how your mortgage can help make planet friendly decisions and help you gain too.

Green mortgages in the UK: What is it?

What exactly are green mortgages? If you decide to go with renovating your home or purchasing a house with environmentally friendly construction methods, your lender may be able to provide you with lower mortgage rates, basically your monthly repayments. These mortgages are known as green mortgages.

Are you eligible for a green mortgage?

To be eligible for a green mortgage, your property should ideally have some of these features.

• An A or B - rated EPC certificate (EPC is a certificate issued with a rating between A - G. A rating is considered the best environmental rating and G is be the least)
• Solar panels 
• Wall insulation
• Double-glazed windows 

It can be things within your property that create a smaller carbon footprint while also helping to keep utility bills low. Mortgage lenders recognise the ecological and financial benefits of these homes, and will often offer special deals for mortgages. You could consider the lower mortgage rate as a reward for your efforts in helping the environment.

Most homes that are eligible for a green mortgage are usually new ones. But that does not mean your old home is not eligible. By implementing some of the above listed energy saving techniques, you may be able to remortgage your old property with a green mortgage repayment rate.

What are the benefits of a green mortgage?

Save Money, Save the Planet: Eco-friendly homes help save you money in multiple ways. Lower energy bills are the most obvious. Thanks to efficient systems such as wall insulation that maximise heat retention and minimise energy waste. Investing in eco-friendly constructions not only means being planet friendly, but they are also a way to bring down unnecessary costs, possibly saving you hundreds of pounds annually. Savings are not only for you, but also as a whole for the country. As described above, green mortgages come with preferential interest rates, further potentially saving you tens of thousands over the loan term. 

Future-Proofing Your Investment: With energy usage concerns and climate regulations evolving rapidly, eco-friendly homes can be termed as ‘future-proofed’ homes. Energy prices continue to escalate globally, and in the UK, it's no different. By creating an energy-efficient home, you are assured of a degree of financial stability during energy crisis periods. Moreover, homes with high EPC ratings are likely to hold their value, or even appreciate, as demand for sustainable living spaces are sought after. So, investing in a green home with a green mortgage is a smart financial move.

Your responsibility towards the planet: Beyond the tangible benefits, choosing a sustainable mortgage instils a sense of purpose and pride. Knowing that you're contributing to a greener future, reducing your carbon footprint, and inspiring others to consider eco-conscious living brings a sense of responsibility and satisfaction. It's about aligning your financial choices with your environmental values, contributing to a collective shift towards a sustainable future.

Access to Exclusive Incentives: Many governments offer additional financial incentives such as green mortgages for choosing sustainable initiatives. Although not currently done, concessions such as grants, tax rebates, and exemptions may come into play in the future. Making eco-conscious borrowing even more attractive. Check with your local policies and explore available schemes to maximise benefits which may already be coming into play.

Conclusion

Your choice to go green sets a pathway where sustainable living is the future in the UK. You become an example for change, inspiring friends, family, and even your mortgage lender to consider the benefits of eco-friendly homes. When enough individuals opt for green mortgages, it sends a powerful message to the housing market and property developers, driving up demand for sustainable living and accelerating the transition to a greener future.

Be among the eco-conscious borrowers and build a world where green mortgages are the norm, not the exception. If you need advice on how to proceed with a green mortgage, speak to our experts at BVS Mortgages and Financial Services. Our mortgage advisers will be able to share specific examples of energy-saving features and their financial impact on your mortgage as well as the available incentives.

This blog post hopefully will help you unlock the benefits of sustainable mortgages and inspire you to make a positive impact on our planet.

* Approved by the Openwork Partnership on 26/02/2024