Green mortgages can reward you for buying or owning an energy-efficient home. Depending on the lender, that could mean a lower interest rate, cashback, extra borrowing or support for home improvements.
But a green label does not automatically mean a better mortgage. The rate, fees, incentives and eligibility rules all matter, so compare green mortgages with standard deals before deciding.
Before you choose a green mortgage
Check your home’s EPC
Your EPC rating could affect which green mortgage products you qualify for.
Compare the full mortgage cost
A lower rate or cashback does not automatically mean a cheaper deal overall.
Check how the incentive works
Green mortgage benefits and eligibility rules vary between lenders.
Consider your future goals
Energy-efficient home improvements could give you access to additional borrowing or other mortgage options.
What is a green mortgage?
A green mortgage rewards or supports the energy efficiency of a property. Some products reward people who buy or remortgage an energy-efficient property, while others help homeowners make improvements.
Green mortgages in the UK can have different eligibility rules and criteria. Some lenders offer products for green properties that already meet their energy-efficiency criteria. Others support extra borrowing for approved home improvements.
How do green mortgages work?
Green mortgages generally follow one of two routes.
Energy-efficient property
Your property already qualifies
The lender may use the home’s EPC rating to check if you qualify. Other lender criteria may also apply.
The benefit could be a lower interest rate, cashback or another incentive. This can apply to existing homes and some new-build properties.
Home improvements
You want to improve your property
Some lenders offer products to help fund energy-efficient home improvements. These may include insulation, better glazing, heating upgrades or installing solar panels.
The improvements, amount available and evidence required vary by lender. You will still need to meet normal affordability and lending criteria.
What EPC rating do you need?
An Energy Performance Certificate, or EPC, shows how energy efficient a property is. An EPC rates homes from A to G, with A representing the highest level of energy efficiency. EPCs can also recommend ways to improve the property.
Improving a home’s energy efficiency may also help reduce energy bills, although the savings will vary by property.
Many lenders use A or B ratings for green mortgage products, but requirements vary. Some lenders use different criteria, while improvement-focused products may be available for lower-rated homes.
Who can qualify for a green mortgage?
Green mortgage eligibility varies by lender. Your EPC rating, property type, deposit or equity, income, affordability and credit history can all affect whether you qualify.
Lenders may consider
What it means
EPC rating
Whether the property meets the lender’s green criteria
Property type
Some lenders restrict products by property type or condition.
Mortgage purpose
Buying, remortgaging or additional borrowing can affect which products are available
Deposit or equity
You still need to meet the lender’s loan-to-value requirements
Income and affordability
The lender will assess whether the mortgage is affordable
Credit history
Normal credit and lending checks still apply
Meeting the property’s green criteria does not guarantee mortgage approval. You must still meet the lender’s standard eligibility and affordability checks.
How much could you borrow?
Use our affordability calculator for a quick estimate.
Are green mortgage rates cheaper?
Green mortgage rates can sometimes be lower than comparable standard products from the same lender. You may also find a fixed rate mortgage with cashback or another green incentive instead of a rate discount.
That does not mean a green mortgage will be the cheapest option across the wider market. Before choosing, compare the full cost before choosing a deal. This includes the interest rate, product fees, cashback and early repayment charges.
A larger fee can cancel out a small rate saving, while cashback may make another product better value.
Which lenders offer green mortgages?
Green mortgage lenders include high-street banks, building societies and other mortgage providers. Products can cover purchases, remortgages and additional borrowing, but criteria and incentives can change.
That is why it helps to compare green mortgage rates with standard deals rather than looking at the green market in isolation.
Check your mortgage options
See current mortgage rates and get a clearer idea of how green and standard deals compare.
Can green mortgages fund home improvements?
Yes, some products support green home energy efficiency. Some lenders offer additional borrowing for approved home improvements. These may include insulation, glazing, heating upgrades or solar panels.
Existing homeowners may also access green options when remortgaging or borrowing more. Before borrowing more, consider the cost of the work and the extra mortgage interest. Weigh this against the expected benefit.
Should you consider a green mortgage?
A green mortgage may be worth considering if your property already qualifies. It may also appeal if the rate is competitive or the incentive offers good value. It can also make sense if you already plan to improve your home’s energy efficiency.
A standard mortgage could still be the better option. It may cost less overall, offer more flexibility or suit your circumstances better.
The key is to compare green mortgages with the wider market, not just other green products.
How to get a green mortgage
1
Check your EPC
Review your property’s current energy efficiency rating.
2
Check which products you qualify for
Eligibility and property requirements vary between lenders.
3
Compare green and standard mortgages
Compare the full cost, including the rate, fees and any cashback.
4
Apply for the best overall fit
You will still need to pass the lender’s usual affordability and eligibility checks.
How Muttuo Mortgages can help
Green mortgage rates and eligibility vary by lender, so compare them with standard mortgage deals before you decide.
Review whether you could borrow more on your current mortgage
Compare mortgage options from more than 100 lenders
Explore remortgage, further advance and green mortgage options
Talk through your options
Explore ways to fund home improvements and understand which mortgage options may suit your property and plans.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Your green mortgage questions answered
What is a green mortgage?
A green mortgage links part of the deal to the energy efficiency of the property. It may offer a lower rate, cashback, additional borrowing or another benefit.
Who is eligible for a green mortgage?
Eligibility varies by lender. Your EPC rating, property, deposit or equity, income, affordability and credit history can all affect whether you qualify.
Are green mortgages cheaper?
They can be, but it depends on the product. A green mortgage may be cheaper than the same lender’s standard deal. But another lender could still offer a lower overall cost.
Do I need an EPC A or B for a green mortgage?
Not necessarily. EPC ratings of A or B are common for products that reward energy-efficient homes. Other products may use different criteria or support improvements to lower-rated properties.
Can I borrow more to improve my home’s energy efficiency?
Some lenders offer additional borrowing for approved energy-efficient home improvements. The amount, eligible work and affordability requirements vary.
Can landlords get green mortgages?
Yes, green mortgage products can be available for buy-to-let properties. Eligibility, EPC requirements and incentives depend on the lender and product.
