An introduction to green lifetime mortgages
They are a relatively new concept in the mortgage industry – but eco-friendly lifetime mortgages are already proving to be popular amongst eco-conscious homeowners seeking more affordable later life home finance solutions.
Here, we have provided a little more information on these innovative products, along with short introductions to some of the key green lifetime mortgage loans currently on the market.
What is a green lifetime mortgage?
In a similar way to green residential mortgages, green lifetime mortgages provide homeowners with lower interest rates, higher borrowing limits, or both, in comparison to most other equity release plans available.
In order to qualify for this type of loan, you will need to either purchase a new build property with an EPC rating of 81 or higher or carry out suitable renovations on your existing home to boost its energy efficiency rating to contemporary standards.
Should you get a green lifetime mortgage?
As long as the loan remains sustainable, and all your financial requirements have been taken into consideration, a green lifetime mortgage is likely to be a viable option.
By taking out this type of loan, you will inevitably benefit from lower rates, and you will also enjoy lower bills and energy costs as a result of living in a more eco-efficient home.
However, we would always advise speaking with one of our equity release brokers before committing to a green lifetime mortgage. Our knowledgeable staff will help you explore all possibilities before settling on a product that will meet your needs, both now and in the future.
What green lifetime mortgages are currently available?
Just has introduced the UK’s first green lifetime mortgage. Its recently launched Just For You Lifetime Mortgage product offers a 0.1% discount on interest rates and a £50 contribution to the cost of your EPC, should you need to apply for one. Required LTVs range from 23% to 51.9% depending on age.
Legal & General also recently launched an energy saver cashback incentive across its lifetime mortgage range. New customers can apply for 10% cashback on their initial advance (up to a maximum of £1,000), while existing borrowers can benefit from a £200 drawdown no more than three times.
The Ecology Building Society, which has been a long-term advocate for green and ethical lending, offers a variety of mortgage products to aid eco renovation, eco refurb and eco new build projects. The eco-friendlier the house will be or become, the bigger the discount the society will offer.
What’s next for green lifetime mortgages?
The green lifetime mortgage sector is growing rapidly. As more homeowners begin to understand the benefits of taking out these kinds of eco-friendly mortgage deals in later life, we expect a wider range of products to become available in the coming years – not least because lenders are being incentivised by schemes like the Green Finance Strategy, which is providing millions of pounds worth of funding to encourage loan providers to offer discounted home finance options to environmentally-conscious homeowners.
For help finding the right later life lending scheme to suit your circumstances, contact Bower today.
Go green with Bower
For more information on the range of green mortgages available in the wider market, or to see if you may be eligible for one of these innovative lifetime mortgage deals, contact our expert brokers today.
Bower provides independent, impartial whole of market advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,495 be payable.
If you are considering equity release, we strongly recommend that you read our ‘Advantages and disadvantages of Equity Release’ page carefully and talk to one of our specialists before deciding if you wish to proceed.
This is a lifetime mortgage or home reversion plan. To understand the full features and risks, please ask us for a personalised illustration.