What is green Mortgage?

Over time, the importance of sustainable development has increased worldwide. Green mortgages help you take a step toward sustainable living, keeping track of the impact we have on the environment around us.

Lenders today prefer giving green mortgages to borrowers to instill a sense of awareness about the depletion of non-renewable resources.

Let’s know more about green mortgage.

What is a green mortgage?

As the name suggests, a green mortgage is a mortgage that ensures a healthier and safer environment. It is an incentive provided by mortgage lenders, allowing homeowners to have a environment-friendly properties. Green mortgages help you move into houses that limit the consumption of energy and other natural resources to a healthy extent.

A green mortgage home is either built in an eco-friendly way or has work done to achieve the energy performance certificate grade of A to C.

If you are planning to remortgage to a green mortgage, work with an experienced remortgage broker to get your work done.

Green mortgages have gained popularity over time, making more and more lenders have them as an option. Most lenders now provide green mortgages to homebuyers to encourage eco-friendly living.

What is the requirement for green mortgage?

A green mortgage is just like any other mortgage, the only difference is the property is more energy efficient. Different lenders have different eligibility criteria to assess mortgage applications. However, an Energy performance certificate (EPC)  rating is a must when it comes to getting a green mortgage.

An EPC rating helps lenders estimate a property’s carbon emissions. An EPC rating allows lenders and borrowers to estimate electricity bills, thereby increasing homebuyers’ affordability.

You can get an EPC rating for your property by visiting the government’s website. If the rating has expired, you can apply for its renewal on the same website.

Can you save on your mortgage by purchasing a green property?

Green mortgages are often associated with new build properties as they tend to have the best EPC ratings. Purchasing a new build property on a green mortgage will be a more beneficial decision as it will reduce your energy bills due to good energy efficiency ratings.

However, some mortgage lenders are strict about the amount they are willing to lend to homebuyers. Borrowers can be restricted to 75% loans for flats and 85% loans for houses.

Additional costs when it comes to green mortgages.

No, there are no additional costs attributed, especially to green mortgages. All the costs and fees involved are the same as they are for conventional mortgages. However, if you want to make changes to the property to improve its EPC rating, you will need to incur some expenses, as discussed above.