green mortgages could reduce mortgage rates, bills and emissions for homeowners

New ‘Green Mortgages’ Could Cut Mortgage Rates, Bills and Emissions

A new initiative means that households could benefit from cheaper mortgage rates and save money on energy bills by reducing their energy consumption.

Recently, the Government announced a £5 million fund to help the financial sector develop green home finance products, such as green mortgages.

Green mortgages

  • Would provide cheaper mortgage rates to customers who have improved their home’s energy EPC rating.
  • To be used as an incentive for homeowners to make their homes energy efficient, as hoped by the Government.
  • The incentive would benefit homes that are inefficient.

Further to this, on 1st July, the Government announced a £10 million innovation fund to industry that companies could win a share of.

£10 million innovation fund

  • Could reduce the costs to retrofit old homes.
  • Companies could win a share of the fund (should they design innovative ways of reducing the cost of retrofitting the UK’s old housing stock). For example, assembling parts of buildings like pre-fabricated roofs or facades off-site and quickly fitting them to homes, minimising disruption for homeowners.

Chris Skidmore, Energy and Clean Growth Minister, said,

“To fulfil our world-leading commitment to reach net zero emissions by 2050, we need an overhaul of our housing stock to tackle the disproportionate amount of carbon emissions from buildings.

By rolling out more green mortgages and reducing the costs of retrofitting older homes we’re encouraging homeowners to improve the efficiency of their homes and save money on their energy bills, helping to ensure everyone has access to a warm and comfortable home.”

If the UK is to continue to move toward a net zero economy, then wider support is needed. Homes are currently responsible for 15% of the UK’s carbon emissions.

The Government believes the UK is the first major economy in the world to pass laws committing to net zero carbon emissions by 2050 and have now committed to making more buildings cleaner, green and fit for the future.