What is a green mortgage?
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In short: A mortgage with a lower interest rate or cashback incentive for buying an energy-efficient home or improving an existing property's EPC rating. Lenders use the Energy Performance Certificate band to decide eligibility.
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Green mortgages reward borrowers whose homes meet certain energy-efficiency standards — typically an EPC rating of A or B for purchase deals, or improvements that raise the rating after renovation. The benefit is usually a slightly lower interest rate, a fee discount, or cashback after completion.
They are part of wider government and industry efforts to cut carbon emissions from housing. A more efficient home should cost less to heat, which can offset mortgage savings and make ownership more affordable over time, though the green discount itself is often modest.
If you are buying, check the property's EPC before you apply — the certificate shows the current band and recommended improvements. If you already own, some lenders offer 'green further advance' products to fund insulation, heat pumps, or solar panels that improve the rating.
Compare the green deal against ordinary mortgages on total cost, not just the headline incentive. A slightly higher rate without green branding could still be cheaper overall once fees and your long-term plans are factored in.
Primary source: gov.uk/government/collections/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance
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