What is a green mortgage?
Definition
A green mortgage is a mortgage that is available on certain homes. These homes have a high energy efficiency rating. Because eligibile homes are typically cheaper to heat, banks may offer a few partial percentage points off the general interest rate for a green mortgage.Green mortgage rates can be cheaper than traditional mortgages from the same lender. However, they are rarely the most cost effective mortgage on the whole market.
The green mortgage market has grown in the UK and over 60 products are now available. These products contribute only 0.4% of total mortgage lending.
The Council’s LHEES Office, and students from the University of Edinburgh’s Business School, produced a report to explore green mortgages and loans for energy efficiency projects.
Eligibility
Green mortgages are available to homes with a valid Energy Performance Certificate rating of A or B. Some lenders will also consider homes with an Energy Performance Certificate rating of C. Some lenders limit green mortgages offerings to homes bought from a housing developer.
To view the report from the consultancy project please email LHEES@edinburgh.gov.uk.
This does not constitute mortgage advice. Anyone interested in green mortgages should speak to a mortgage broker.
For information on grants and loans available to improve the energy efficiency of your home, visit the Home Energy Scotland website.