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A Guide To Green Mortgages

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Last Updated: 27/04/2022 12:44:22   Tags: Mortgage, Blog, Property, Finance, Eton Mortgage, Eton Mortgage, Windsor Finance

What is a green mortgage?
A green mortgage is a type of mortgage that buyers can use when purchasing a property that meets specific energy efficiency standards. These environmentally friendly properties attract these green mortgages, usually available at a lower interest rate than standard mortgages offered by the same lender. These mortgages are only available for homes that carry a good enough eco-rating. 
Some mistake the term green mortgage to mean a loan backed by environmentally-friendly funds or that some of the mortgage's profits are somehow invested into sustainability or renewable energies, but this is not the case. 
The green element to these mortgages is precisely how they incentivize the improvement of a property's energy efficiency rating. 
 
How do green mortgages work?
Included in a lender's calculations when underwriting a mortgage application is household spending, which incorporates energy costs. 
Green mortgages consider EPC ratings when determining a household's projected energy expenditure. This means that buyers who purchase a house with an A or B EPC rating may be eligible to borrow more because the money they will save on reduced energy bills can be put towards their mortgage repayments. 
 
There are three types of green mortgages:
• Lower lending rates for properties with eligible high energy ratings
• Release of capital to cover the costs of improving a property's energy efficiency. This can be done through discounted mortgage rates, cashback on an existing mortgage, or credit.
• Additional borrowing is available for energy efficiency home improvements through re-mortgaging or moving to a new property that would benefit from such upgrades.
 
Green mortgages incentivise homeowners to reduce a property's carbon footprint. In addition, undertaking energy improvement works can result in owners recouping investment costs through reduced energy bills. A good Energy Performance Certificate (EPC) rating can also cause a property's value due to the lower running costs.

Green mortgage eligibility
You should be eligible for a green mortgage if you buy a home that holds an EPC rating of B or above or want to re-mortgage once you have improved your property's rating to B or above. 
That is, of course, so long as you still meet all the usual lending criteria for a mortgage. Lenders will still check your credit score and assess your application based on your financial circumstances and your ability to repay the debt. 
Improvements to a current property could be achieved through renovations like upgrading insulation or installing solar panels. Green mortgage eligibility criteria will vary between lenders, so it is best to make sure your home and proposed upgrades would qualify before undertaking the work. 
 
What is an Energy Performance Certificate?
An Energy Performance Certificate (EPC) provides a rating score regarding the energy efficiency of a property. Ratings last for ten years and range from G (the worst) to A (the best). This rating can estimate the energy consumption and running costs of a home. The certificate also issued details on how the owner could improve the property's energy rating. 
EPC ratings are recorded publicly and can usually be found via epcregister.com for properties in England, Wales, and Northern Ireland. For property ratings in Scotland, there is a separate registration. 
 
Improving the EPC rating of your home attracts a range of benefits, including:
• reduced carbon footprint
• lower energy bills
• access to potentially lower mortgage rates via green mortgages
• potential for increased property resale price
• increased mortgage borrowing amount
 
View sustainable homes on the market with Guild Members here.
 
What are the pros and cons of a green mortgage?
The advantages of a green mortgage are perhaps more evident than any potential drawbacks, so it's essential to understand both before deciding on one.
 
Advantages of a green mortgage include:
• the peace of mind knowing that your property is helping to reduce your family's carbon footprint
• Your property is potentially holding or increasing its value more quickly than others on account of it qualifying for a green mortgage
• the potential for you to be eligible for lower interest rates or cashback
 
Potential disadvantages of a green mortgage include:
• the availability of green mortgages is relatively limited
• the improvements required to make your property eligible may be expensive
• there may be lenders offering lower rates on non-green mortgages
 
Is a green mortgage the same as an eco mortgage?
Not necessarily. In some cases, the terms 'eco mortgage' and 'green mortgage' are used interchangeably when referring to the same financial product, but technically, they aren't the same thing. 
An eco mortgage typically refers to a mortgage that relates to a home built with sustainable materials and using eco-friendly construction methods. Such properties can be trickier to secure finance on, and some lenders, therefore, offer specialist loan products called 'eco mortgages.'

Final thoughts
Having a green mortgage certainly has its benefits. It gives you the satisfaction of knowing that you are doing your bit for the environment. Still, you could score a lower interest rate. There is also the potential for your home's value to increase as a result—additionally, the greener your home, the more opportunity to tap into savings from reduced energy bills. 
So long as any necessary improvements are affordable and the mortgage deal you consider is suitable for your finances, green mortgages are well worth considering. Just compare against standard mortgage offerings first, as green mortgages do not guarantee lower interest rates. 
 
Get in touch
If you're looking for an estate agent who have the planet in mind and can help you navigate green mortgages, contact your local Guild Member and start a conversation today.

The Best British Villages You've Never Heard Of

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Last Updated: 13/04/2018 17:04:03   Tags: Property, Blog, Towns Special

Big or small, the villages in England are always a treat. From St. Ives to Castle Coombe, we’ve all seen their many wonders. But what if you’re looking for an experience that’s off the beaten path? We’ve found some of the most charming villages in the UK that you’d never heard of.

1. Cerne Abbas, Dorset

Cerne Abbas is a Dorset treasure that’s certainly worth a visit. Located along the River Cerne, the village grew up around an abbey and is known for its lovely architecture and the ‘rude giant’ that features in its fields.

2. Hellidon, Northamptonshire

A quaint village in Northamptonshire, Hellidon is perfect for those searching for a quiet retreat. Try one of the many country walks, or if you fancy something a bit sportier, the pool and spa just outside the village is the perfect way to spend an afternoon.


3. Saltaire, West Yorkshire

Saltaire is a town next to the River Aire that developed around a Salt Mill in the nineteenth century. The mill has now been converted into an art space and a shopping arcade. Walking through the town can make you feel like you’ve stepped back in time.

4. Framlingham, Suffolk

This market town is full of history and mystery. First known for its connections to the Howard family of Tudor fame, Framlingham is the birthplace of many other notable Brits such as Ed Sheeran. The ‘Castle on the Hill’ referenced in Sheeran’s hit single is a must-see.  

5. Presteigne, Wales

Presteigne is a town right on the border between England and Wales. It’s surrounded by stunning untouched countryside, which makes it perfect for a rural retreat, but that’s not all Presteigne has to offer. There’s a vibrant high street and cultural centre, and the annual Presteigne Music Festival is an internationally known event that’s not to be missed.


6. St Mawes, Cornwall

A fishing village situated on the end of the Roseland peninsula, St Mawes is one of the most picturesque villages you’ve never heard of. It’s almost completely surrounded by the sea, which means that the views are spectacular. The community is known for its close ties and welcoming nature, making it a real Cornish gem.

7. Aysgarth, Yorkshire

Aysgarth is located in part of the Yorkshire Dales National Park. It’s home to Aysgarth Falls, one of Britain’s loveliest waterfalls, which featured in the film Robin Hood.


8. Higher Bockhampton, Dorset

Higher Bockhampton is tucked deep into the Dorset countryside, surrounded by rolling hills and high hedges. This village is the setting of Thomas Hardy’s first five books and is where Hardy was born. You can even visit Hardy’s cottage, which is now a National Trust property.

9. Hutton-le-Hole, North Yorkshire

It doesn’t get more English than this North Yorkshire village. There’s a lovely quiet stream, plenty of pubs, and moorland sheep graze throughout the village. It’s the perfect ice cream picnic spot during the summer months.


10. Lustleigh, Devon

Lustleigh might be the most picturesque village in England. It’s one of Devon’s most well-maintained villages. Thatched cottages surround a 13th century church, bookended by the Primrose Tea Rooms and a village shop. Have a pint at the pub while you watch a cricket match on the local pitch.

Are you looking for a home in one of these hidden gems? Contact your local Guild agent today.