From ‘gazumping’ and ‘equity release’ to ‘interest-only mortgages’ and a ‘mortgage in principle’ — the industry isn’t short on terms for homebuyers to get to grips with.
And in 2025, it’s no different.
“Green mortgages are one of the latest terms to gain traction in the sector,” mortgage adviser Jo Jingree, and founder of Mortgage Confidence, says.
And with a survey revealing that a quarter of homeowners plan on making ‘green improvements’ to their homes in the next year, it’s little wonder why.
So, what are green mortgages?
We’ve touched on green mortgages before.
But to quickly bring you up to speed: a green mortgage is a type of mortgage that essentially rewards you on how energy efficient your home is.
The incentives of taking out a green mortgage vary from one lender to the next. But for the most part — no matter whether you’re a first time buyer, you’re moving home or you’re a landlord — green mortgages reward qualifying customers for purchasing or remortgaging an energy efficient home by offering reduced mortgage rates. Some lenders may even offer up to £2,000 cashback.
How eco-friendly your property is depends on your home’s Energy Performance Certificate (EPC). This all-important EPC gives your property an energy efficiency rating from A to G, with A being most efficient and G being the least.
Generally speaking, green mortgages can only be taken out on properties that have an energy efficiency band of A or B.
Why green mortgages are going viral
Launched in 2018, green mortgages might not be anything new. But as detailed in NatWest’s Greener Homes Attitude Tracker, one in five adults surveyed said they would consider taking out a green mortgage — with 4% already having made the switch.
In the same survey, 65% of homeowners confirmed they are planning eco-friendly upgrades to their property in the next 10 years. While 25% of homeowners (a record high) plan on improving the environmental sustainability of their home in the next 12 months, with the most popular home improvements including electric car charging points, solar panels, triple glazing, and heat pumps.
“So there’s certainly a growing commitment to more planet-friendly practices in the property space,” Jo says. “And green mortgages are just one of the ways in which lenders can help capitalise on this.”
If you’re swayed by the idea of introducing eco-friendly upgrades to your home with the view of taking out a green mortgage, here are some of the benefits that can come with doing so.
The benefits of giving your home a green glow up
1. You’ll be doing your bit for the environment
Giving your home or rental a green makeover — with the likes of a heat pump, double glazing and/or loft insulation — can help you reduce your carbon footprint and impact on the environment. It can also go a long way to boost your EPC.
“Of course, cost can be a barrier to giving your home a more sustainable upgrade,” Jo notes. “However, with the UK government committing to reduce its greenhouse gas emissions to net zero by 2050, there are a few government-backed grants and schemes (see here) that can make doing so a little bit more affordable.”
2. It could improve your house resale price
Planet-friendly home improvements can enhance your property’s value while also benefiting the environment.
For example, a 2023 survey highlighted that 57% of people were happy to pay more for a house with renewable or low-carbon energy sources like solar panels, heat pumps or EV chargers.
The same survey found that 25% of people said they’d be willing to spend between £15,000 and £25,000 extra for a green property. And 11% were willing to pay £45k extra.
3. You could reduce your bills
Adding eco-friendly additions to your home doesn’t just help you cut down your carbon footprint. It can help you save money on your energy bills too.
For example, improved insulation can keep more heat in and reduce the need to crank up the thermostat. While energy efficient glazing reduces heat loss through windows and means fewer draughts and cold spots.
Or, perhaps you’re thinking of adding solar panels to your home? According to the Energy Saving Trust, an average 3.5 kilowatt-peak solar panel system costs around £6,100 to install — but a typical household with this system can save anywhere between £190 and £350 a year off bills. Plus if you’re generating more electricity than you’re using, you can sell extra energy to the grid.
“Of course, solar panels can be a big upfront cost,” Jo says. “And based on the Energy Saving Trust’s figures, if someone was in all day using electricity, it could take a typical home at least 10 years to recoup this outlay. But if you’re planning on staying in your home long-term, solar panels could be a worthwhile investment.” To find out how much you could save with solar, you can use this handy calculator.
4. Potential access to lower mortgage rates, thanks to green mortgages
For example, if eligible, NatWest’s green mortgage offers a reduced mortgage rate on a 2 year or 5 year fixed rate mortgage if you’re purchasing or remortgaging a property with an EPC rating of A or B.
While Barclays’ green mortgage rewards qualifying customers with lower mortgage rates on certain deals when you buy an energy efficient home.
To go green? Or not to go green?
“Green mortgages won’t be right for every home or person,” Jo says. “But they could be an avenue worth exploring, especially for those who are thinking of purchasing an energy efficient home or those who are already planning eco-friendly upgrades.”
If you’d like to explore green mortgages or remortgaging, get in touch with multi-award winning mortgage adviser Jo.
Jo offers a free 30 minute no obligation phone call. So, whether you’re a first time buyer, remortgaging, self-employed or a landlord looking to give your rental an eco-evolution, do get in touch.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £399.
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