Homebuyers looking to improve their green credentials may be interested to learn that Northern Ireland’s Danske Bank is now offering customers in England a carbon-neutral mortgage.
According to Mortgage Introducer, the product will be available to first-time buyers, home movers, and for remortgages, and will be available with just a five per cent deposit. The bank is also offering a 90 per cent loan-to-value (LTV) for new builds and is taking part in the Help to Buy Equity Loan Scheme.
But what is a carbon-neutral mortgage?
Danske Bank’s carbon-neutral mortgage involves the lender offsetting the carbon emissions generated throughout the mortgage lifecycle so there is no environmental impact. Certified by the Carbon Trust, the product is the only carbon-neutral mortgage in the UK.
To ensure it is emissions-free, Danske Bank needed to determine the carbon footprint of every mortgage product in its portfolio, which the Carbon Trust calculated to be 96kg of carbon, equivalent to driving a petrol car 241 miles.
This figure represents the complete mortgage process from beginning to end, including all the paperwork and digital storage.
The bank has offset the 96kg by investing in various wind energy projects in India.
The bank’s carbon-neutral mortgage is already available in Northern Ireland and has proved to be so popular that almost a quarter of their new mortgages are now carbon neutral.
Who can apply for Danske Bank’s carbon-neutral mortgage?
The mortgage is only initially available to home buyers in the South East, South West and East of England through brokers registered with the Mortgage Advice Bureau.
To qualify, the house requiring a mortgage must also have an EPC (energy performance certificate) rating or PEA (predicted energy assessment) rating of A to C.
Borrowers can choose from loan values of 60 per cent LTV up to 91 to 95 per cent LTV at two or five year fixed rates, with a purchase rate of £999 and free standard valuations.
Can a green mortgage really help you save money and the planet?
The ultimate aim of green mortgages is to reward home buyers for making environmentally-friendly choices, such as buying properties with good EPC ratings. Green mortgages typically offer incentives such as more competitive terms, such as lower interest rates, cash-back deals, and discounted arrangement fees.
Green mortgages are not a new product, as they are already offered by several lenders, including NatWest and Barclays, but Danske Bank is the first lender to develop and offer a carbon-neutral mortgage and proactively mitigate carbon emissions.
Whether or not a green mortgage can save you money will depend on your own circumstances. For instance, your income and credit score will impact the interest rate you’re offered.
As with any financial product, the best way to make sure you’re getting the most favourable terms for your needs is to compare mortgages from different lenders and seek advice from financial experts and mortgage advisors.
If you’re looking for mortgage advisors in Berkshire, come and talk to us today.