Green Mortgages in the UK

Today, there are no clear definitions of green mortgages because different mortgage providers are promoting different deals. However, they have one thing in common: lenders offer them with the aim of making consumers use financial services that will be beneficial to the environment.

Green mortgages (also known as an ethical or ecological mortgages) have gained more popularity over the last couple of years. People, especially families with kids, are becoming more environmentally conscious these days. Painfully realizing the damage that’s been caused to the Earth by humans, many people are eager to take part in eco-initiatives in order to lessen any of the damage, and make the Earth a better place for future generations. Green mortgage is one clear example of this trend.

The issues of carbon emissions and global warming are incessantly discussed by the media and the Government makes attempts to make us follow the right direction to become eco-friendly or ‘greener’. Thus, it it is not surprising that the banking sector also show signs of going green. As a matter of fact, some UK lenders have already started to offer ‘green mortgages’, advertising them as a sustainable and ecologically rational way of funding the acquisition of our homes.
To qualify for a green mortgage, the house you want to buy must conform to a certain standards of ecological quality, and if it doesn’t, you should consider turning it into an eco-friendly property after purchase.

Carbon neutral homes

However, not all "green mortgage" providers have their focus set on encouraging environmentally friendly improvents to property. Instead, they concentrate on compensating for carbon imprints.

Green mortgages offered by such providers helps offset the damage caused to the environment. Typically, this is achieved by planting a certain number of trees on the borrower’s behalf for the first years of their mortgage. As soon as the number of the trees planted reaches 40, the property can be regarded as carbon neutral, which means that the estimated carbon emissions from the home are compensated for by carbon dioxide absorption rate of the trees.

Green Home Improvements

To benefit from the green products offered by mortgage providers, you might want to think about possible environmentally friendly home improvements. As a rule, it is possible to get the necessary funding to assist with eco-friendly home improvements. Normally, such improvements may include:

Energy savers
One can make a property more environmentally friendly simply by using energy efficient products (for example, light bulbs). It is also possible to have places for recycling within the kitchen.

Under-floor heating
Unlike conventional heating methods that heat from the top down, under-floor heating is much more rational from the environmental perspective. It heats from the floor upwards, which is substantially less energy-consuming and, therefore, cheaper in the long run.

Water conservation
As a possible option, you can get energy efficient bathroom items installed in your house. You might also consider having technology installed in your house that enables collection and recycling of rainwater to be reused for the gardening and water supply.

Insulation is very important for any energy efficient property. You can ensure that your home has a good and eco-friendly insulation by using sheep's wool.

It would be necessary to make a list of the options that can be used and talk to your lender to check whether you can be given any financial assistance. Every time you undertake any work, think about whether it could be done in a “greener” way, since this may help you qualify for a green mortgage in future.

The Future of Green Mortgages

It should be emphasized that currently only a limited number of lenders offer green financial deals on the market. However, the number of green products is increasing, and several financial institutions of the UK are getting ready to launch green financial deals. Still, it is unlikely that green mortgages will mushroom the market and turn from the niche products into mainstream ones in the nearest future.



The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

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