With rising energy bills and a growing focus on sustainability, more homeowners and buyers are asking — what is a green mortgage, and is it actually worth it?
Many lenders now offer lower interest rates or cashback incentives for homes with high Energy Performance Certificate (EPC) ratings. But how much difference can it really make to your finances?
Let’s break down how green mortgages work, who qualifies, and whether they genuinely save you money.
What Is a Green Mortgage?
A green mortgage rewards you for buying or owning an energy-efficient property.
Homes with an EPC rating of A or B typically qualify for preferential rates, cashback, or other incentives.
For example:
- Barclays Green Home Mortgage – lower fixed rates for new-builds rated A or B.
- NatWest Green Mortgage – rate discounts for properties with high EPC scores.
- Nationwide Green Reward – cashback up to £500 for existing borrowers improving efficiency.
Essentially, the better your property’s efficiency, the better your potential deal.
Why Lenders Offer Green Mortgages
Energy-efficient homes are seen as lower-risk assets because:
- They’re cheaper to run, reducing monthly outgoings.
- They often retain value better as EPC rules tighten.
- They align with lenders’ environmental and social governance (ESG) goals.
That means lenders are willing to offer slightly better pricing — and buyers can benefit financially and ethically.
Do Green Mortgages Actually Save You Money?
Savings vary depending on your lender, rate, and property type.
The difference is usually between 0.05% and 0.25% lower interest compared to a standard product.
For example:
On a £250,000 mortgage, a 0.20% lower rate could save you around £300–£400 per year — on top of reduced energy bills from living in a more efficient home.
While not a life-changing discount, it can tip the scales if you’re choosing between similar properties or mortgage offers.
Improving Your EPC Rating Before Applying
If your property isn’t already A or B-rated, improving its energy efficiency could unlock better mortgage terms in the future.
- Common upgrades include:
- Installing loft or cavity wall insulation
- Switching to LED lighting and efficient boilers
- Adding solar panels or smart thermostats
Mortgage Knight advisers can help you estimate potential EPC impacts and identify lenders offering green improvement loans or refinance incentives.
Are Green Mortgages the Future?
With the government targeting net-zero emissions by 2050, the property sector is under increasing pressure to modernise.
Expect green lending to become the norm rather than the exception — especially for new-build developments.
However, it’s important not to overpay for a “green” label. Some standard products may still beat green rates on overall value, so always compare both before applying.
Case Studies
Case Study 1: Alice – New-Build Buyer
Alice purchased a new-build rated EPC A. Through Mortgage Knight, she accessed Barclays’ Green Home Mortgage and saved £25 a month compared to a standard deal — plus £500 cashback.
Case Study 2: Mark – Remortgaging a Period Property
Mark upgraded his Victorian home with insulation and double glazing, improving his EPC from D to C. This allowed him to access a Nationwide green-incentive product and lower his monthly payments.
Case Study 3: The Patel Family – Energy-Conscious Landlords
After upgrading their rental property’s EPC to B, the Patels secured a green buy-to-let rate with NatWest, reducing interest costs by 0.15% and ensuring compliance with future EPC rules.
Frequently Asked Questions
Q1. What EPC rating do I need for a green mortgage?
Ans: Most lenders require a rating of A or B, though some accept high C ratings with proof of improvements.
Q2. Can I get a green mortgage when remortgaging?
Ans: Yes — many lenders offer green deals for existing properties that already meet the EPC threshold.
Q3. Are green mortgage rates always cheaper?
Ans: Not always. Compare overall costs, as standard deals may sometimes offer lower total repayments.
Q4. Can landlords benefit from green mortgages?
Ans: Yes. Green buy-to-let products can offer better pricing and future-proof properties ahead of tighter EPC rules.
Q5. Will green mortgages become mandatory?
Ans: No, but as regulations tighten, energy efficiency will increasingly influence property value and mortgage eligibility.
Professional Green Mortgage Guidance
If you’re a contractor looking for professional mortgage guidance, we’re here to help. Our specialist knowledge and lender relationships enable us to provide expert advice tailored to your situation.
Mortgage Knight can help you compare lenders that reward energy-efficient properties — and find out if you qualify for cashback or discounted rates.
Speak to a Mortgage Knight Adviser
