Green mortgages
Green mortgages, also known as ethical or sustainable mortgages, are better for the environment. Although they are currently only offered by a few mortgage lenders, green home loans are becoming more popular.
A green mortgage can help the environment in several different ways and to different extents. Some lenders provide green mortgages by planting a certain number of trees per loan, thereby offsetting its carbon footprint. Alternatively, they make contributions to charities that support the environment or the welfare of the less fortunate.
Other green mortgages will only be lent on those houses that have an ethical/sustainable direction. Furthermore, some green lenders will donate towards the environment on behalf of the borrower.
Which lenders offer green mortgages?
Five mortgage lenders currently offer a 'green mortgage' package:
- The Co-operative Bank ,
- The Norwich Peterborough Building Society
- The Ecology Building Society
- The Hanley Economic Building Society
- Teachers Building Society
One thing that all of these lenders have in common is that they all support reforestation schemes, so when you take out mortgages with them, you know that you are helping the environment.
Mortgage broker, London and Country, also offers green mortgages without any gimmicks attached.
Could I borrow on a green mortgage to start a smallholding or buy renewable energy?
Ecology Building Society will only lend on properties providing environmental benefit, including organic smallholdings and farms. Ecology fills a niche in the market, and borrowers can even reduce their headline rate by borrowing money to install energy efficiency measures such as renewable energy systems.
Could I save money by being green with my mortgage and house?
Although the answer is yes in many cases, it is up to the individual to decide whether or not their environmental actions are best taken on their mortgage loan.
Is the green mortgage loans market likely to grow?
With environmental concerns at the forefront of political agendas and public consciousness, it is only a matter of time before other companies start to offer ethical, sustainable and green mortgages.
Can I save money on my loan or am I paying to be green?
This depends on the broker you choose, your individual circumstances and the type of loan you are interested in. For instance, if you are thinking of a renewable building project involving entirely sustainable materials, it may be that a green loan from a building society like Ecology is your cheapest and best option.
Most green mortgage loans on the market appear to be competitive, although some experts urge borrowers to shop around, find the cheapest headline rate, and then invest your savings into the environment.
Could I save money by making my house more green and energy efficient?
Absolutely, energy efficiency is the key to cutting down bills. At its most simple, you can lose heat from hundreds of different areas around the house. Whether your energy efficiency measures are as simple as insulating your loft, you could save money almost straight away.
Additional benefits
Often you will be able to take out a package where your household emissions and energy usage will be monitored; therefore you can benefit from the knowledge that you are causing less damage to the environment and you can save money on you electricity/gas bills!
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