FISCUS MORTGAGES - INFORMATION AND ADVICE

Green Mortgage

A green mortgage refers to mortgage products that attempt to redress the adverse environmental effects of housing. This is still quite a small sector of the mortgage market, however there are some big providers involved in offering green mortgages.

HOW A GREEN MORTGAGE WORKS

There are three distinct features available with green mortgages, with different providers offering either one or a combination of the following:

1. Funds donated to charity with every accepted mortgage – This is a simple enough idea. Take out the mortgage, and the lender will make a donation to a “green” charity, thus helping organisations that want to improve our environment.

2. Lender only works with green companies – The bank or building society that offers the green product will ensure that partner companies involved with the supply of the mortgage are not environment-damaging organisations.

3. The property is environmentally sound or can be improved – Some lenders will insist that the property is of a certain ‘green’ standard, using the SAP energy-efficiency rating. Others will offer a free energy survey, which may lead to energy-saving improvements to your property.

The first two features focus on helping the environment at a corporate level. The third feature is aimed at the individual’s home, leading to obvious money-saving benefits from improving the energy-efficiency of your property as well as the reduction in negative externalities.

WHO OFFERS GREEN MORTGAGES?

The Co-operative Bank
This bank provides all three points listed above: every year, the bank will make a donation to the green charity Climate Care. This donation is based on the number of people that have signed up for their green mortgages.

Alongside this, they insist they will only work with companies that will not damage the environment adversely. This focuses on not working with companies from industries that are known to pollute heavily.

When it comes to the borrower and his property, the Co-operative is a little more relaxed. They don’t mind if the property is not particularly eco-friendly, nor do they seem to mind if the borrower happens to be Chairman of Pollution Inc (this is the case with all green mortgage providers). The bank’s argument is that the greater the number of green mortgages they have, the bigger their donation to Climate Care.

The Co-operative does provide a Home Energy Report for the property in question, which outlines the areas in which the property can reduce pollution, energy and generally be “greener”.

The Norwich & Peterborough Building Society (NPBS)
The NPBS offer two types of green mortgage: one for brand-new properties and one for existing homes. When it comes to new dwellings, the society’s “New Build Green Mortgage” is available to individuals moving into a property with a SAP rating of at least 80, which basically means that the home must be energy-efficient.

The mortgage for existing homes includes a free energy survey, and as a bonus, they offer £500 alongside this to help with energy-saving home improvements. The mutual is clearly attempting to improve the energy profile of existing homes with this particular mortgage. However, it holds a certain appeal for those that are less conscious of the fight to save our environment, and simply want to get some help with buying a home. The mortgage is good for individuals thinking of renovating an empty residence. This could make it an interesting option for first-time buyers that are struggling to find reasonable homes that are ready-to-inhabit.

By opting for a NPBS green mortgage, it would be possible to get an initial bit of help with renovating something a little run-down and turning it into your ideal home. The only downside to this mortgage though, is that the loan-to-value (LTV) is a maximum of 85% of the property value.

NPBS work with Future Forests, which revolves around a policy called Carbon Neutral®. Simply put, they attempt to redress the CO2 emissions of properties and do this by planting trees that offset the level of this pollutant, which in turn should protect the planet from global-warming. In the case of a NPBS mortgage, the organisation will plant 40 trees over five years, which theoretically, should mean that the pollution from your property is offset. Whether these claims are accurate is open to debate, but it must help to some degree and must be taken as just one strand of the several green features of the Norwich and Peterborough mortgage.

The Ecology Building Society
Founded in 1981, The Ecology “is a mutual building society dedicated to improving the environment by promoting sustainable housing and sustainable communities.”

The mutual will carry out an environmental study of the property that relates to any new mortgage, and will consider any plans on this property. The Ecology is a useful lender when it comes to providing mortgages for properties that require renovation, and here the Ecology can help with the environmental impact of your plans for your home. The society aims to help improve the energy-efficiency of any property, and alongside this, consider renovation itself a form of recycling.

The Ecology, like the competition, do not expect the borrower to be a particularly green individual, but do expect the property in question to be environmentally sound/become greener as a result of your involvement in it.

If you are interested in green mortgages, the please complete our brief mortgage enquiry form and we will have an Independent Financial Adviser (IFA) contact you within 24 hours. They will be able to discuss your mortgage options and provide information and advice on all the aforementioned green mortgages.