UK lenders, including Nationwide, are launching green mortgages and incentivising energy efficient home purchases and improvements.
This could arguably be good news for buyers seeking cashback but every mortgage broker knows to read a contract carefully and compare numerous other options before advising borrowers to sign.
The right advice can save you money and help you find rewards for making energy efficient improvements to your current property or when purchasing a new, green property.
What homes qualify for green rewards with Nationwide?
Nationwide’s Green Reward is available to eligible applicants purchasing any property, whether it’s an existing house, flat or new-build.
Any property with a Standard Assessment Procedure (SAP) rating of at least 86+, which is equivalent to an Energy Performance Certificate (EPC) rating of A or a high B.
Those purchasing a home with an SAP rating of 92 or above (EPC-A rated) will benefit from £500, while those buying somewhere rated at SAP 86 to 91 (high EPC-B rating) will receive £250.
The green boost could potentially help some first-time buyers get a total cashback of £1,000 if they take out a mortgage as the latest offer can be claimed alongside the £500 cashback first-time buyers already receive when buying their first home with Nationwide.
When do buyers get their cashback with Nationwide Green Rewards?
After completion of the mortgage the Society will review the EPC register to check the rating of the property.
Once the rating of the property has been confirmed, the Green Reward cashback will be paid to the buyer within four weeks of completion.
What is the eligibility criteria for Nationwide’s Green Reward offer?
To be eligible to receive Nationwide's Green Reward, you’ll need:
To be buying a home with a Nationwide mortgage (either as a first-time buyer or a home mover)
To complete your mortgage on a property with a score of 86 or more, and
The EPC document needs to be on the government’s online register within 2 weeks of your mortgage completing.
Borrowing more to make a current property energy efficient
Since April the 26th, 2021, Nationwide also provides green incentives to their customers who are seeking additional borrowing on top of their current mortgage.
The society recently reduced the rate on its Green Additional Borrowing product to 0.75% for loans of between £5,000 and £25,000.
Homeowners looking to borrow between £5,000 and £25,000 on top of their current mortgage with Nationwide, can do so at this lower rate as long as at least 50 per cent of the loan is spent on energy efficient home improvements.
The new rate, which is available up to 85% LTV and comes with no product fee, is the same regardless of what LTV level the borrowing is at.
Henry Jordan, Nationwide’s director of mortgages, said:
“We also recognise that there are people who will attempt to make their home greener and more sustainable, which is why we recently cut the rate on our Green Additional Borrowing product and are pleased to now offer this through mortgage brokers as we continue to play our part in helping to reduce the carbon emissions of the UK’s housing stock.”
*Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
What counts as an energy improvement?
To improve energy efficiency of new and existing homes, Nationwide will provide their reduced rate of 0.75% for additional borrowing if at least 50% of the loan is spent on energy efficient home improvements such as:
Fitting loft or under floor or cavity wall insulation
Upgrading to double or triple glazed windows
Air source heat pumps
Electric car charging stations
Swapping to a condensing boiler
Installing low energy lighting
Installing an insulating hot water cylinder
What other lenders provide green mortgage incentives?
Barclays, NatWest and RBS are all offering green mortgages too, each with varying incentives including cashback.
In fact, according to the IMLA, three in ten mortgage lenders have already launched or intend to launch a green mortgage product in 2021.
Your ability to take out a green mortgage will vary heavily depending on the lender and your own circumstances such as your age, annual earnings, credit history and stability of income.
If you’re looking for a green mortgage or additional borrowing for green home improvements, search a range of lenders and take the time to compare each with an expert while keeping your own financial and personal circumstances in mind.
*Your home may be repossessed if you do not keep up repayments on your mortgage.