Green Mortgages — Better Rates for Energy Efficient Homes

A green mortgage — sometimes called an eco mortgage or energy-efficient mortgage — is a mortgage product that offers preferential terms to borrowers who own (or are purchasing) a property with a high Energy Performance Certificate (EPC) rating. The idea is that energy-efficient homes represent better-quality collateral and lower long-term running costs for occupants, making them lower-risk for lenders.

EPC rating requirements

The vast majority of green mortgage products require an EPC rating of A or B. EPC ratings run from A (most efficient) to G (least efficient). Most UK homes currently sit at C, D, or E. Properties with an A or B rating tend to be either newly built (where energy efficiency standards are highest) or older homes that have undergone significant energy efficiency improvements such as insulation, solar panels, or heat pump installation.

Your current EPC certificate shows your rating and will also suggest improvements that could increase it. EPCs are valid for 10 years, so if you had one done some time ago and have made improvements since, it may be worth commissioning a new assessment before applying — a better rating could unlock a more competitive mortgage rate.

Which lenders offer green mortgages and what do they offer?

Most major UK mortgage lenders now offer green mortgage products. Barclays, Halifax, NatWest, Nationwide, and Virgin Money all have green mortgage ranges, as do several specialist lenders and building societies. Typical benefits include a rate discount of 0.1%–0.2% compared to the equivalent standard product, and cashback incentives ranging from £250 to £1,000 paid on completion.

The terms vary significantly between lenders — the same EPC A property might qualify for a 0.1% discount with one lender and 0.2% with another, plus different cashback amounts. This is where using a whole-of-market broker adds real value: we identify the combination of rate and cashback that delivers the greatest total benefit for your specific loan size and LTV.

Green home improvements and further advance

Some lenders offer a further advance (additional borrowing secured against your property) specifically to fund energy efficiency improvements — insulation, double glazing, heat pumps, solar panels, EV charging points. These green improvement loans are typically at competitive rates and can be used to bring your property up to an A or B EPC rating, positioning you for a better standard mortgage rate at your next remortgage.

Why EPC ratings matter for future mortgage applications

EPC ratings are increasingly important for mortgage applicants, not just for green products. Some lenders already charge higher rates or restrict lending on properties with very low EPC ratings (F or G). Regulatory pressure on lenders to consider climate risk in their mortgage books means that EPC ratings are likely to play a growing role in mortgage pricing over the coming decade. Improving your property's energy efficiency now is both financially beneficial and future-proofs your mortgage options.