New Renovation Mortgage Incentivising Green Improvements Launched by Ecology

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A new green mortgage has been introduced by Ecology Building Society to help people renovating a house

The society’s new variable rate Renovation mortgage* is the latest in its line of mortgages to help self builders and renovators, which Ecology says will help to accelerate energy-efficiency improvements in homes. 

The Renovation mortgage is designed to incentivise and encourage borrowers to upgrade homes to a better energy efficiency rating. And the society has confirmed that Green Homes Grant funding can be used to complement the mortgage where qualifying work is being undertaken.  

It starts off with an initial rate of 3.65% while work is underway, then upon completion renovators are eligible for a discount of 0.25% for every energy rating step improvement based on the Energy Performance Certificate (EPC) of the property (up to a maximum discount of 1.50%). 

Those who renovate to the Passivhaus EnerPHit standard will be eligible for an enhanced discount of 1.25% upon completion of the works, resulting in a variable rate of 2.4% for the remaining term of the mortgage. 

Daniel Capstick, mortgage manager of Ecology Building Society, said: “Now more than ever it’s important that lenders play an active role in a sustainable recovery, helping to build back better. 

“We’ve been leading the way on green mortgages for nearly 40 years and we hope that our new Renovation mortgage will incentivise more people to consider retrofitting their home, which will be critical in the fight against climate change.” 

Retrofit Strategy Target

Ecology has introduced the Renovation mortgage to coincide with growing calls for the government to introduce a national retrofit strategy to improve the energy efficiency of existing homes. 

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The society says the mortgage will help to address the colossal challenge of retrofitting the UK’s 27 million homes to reach the UK’s Paris climate change targets. 

Russell Smith MD of Retrofit Works, welcomed Ecology’s new mortgage. “The sheer scale of the retrofit task is huge, requiring one home to be retrofitted every 35 seconds between 2020 and 2050,” he said.

“Ecology has been a long-standing provider of mortgages for whole house retrofit and, given the desperate need for innovative finance, it’s good to see them renewing their focus on supporting renovations.  We’d like to see other lenders joining Ecology, as part of a government-led national retrofit programme, to ensure that finance isn’t a barrier to improving the energy of our homes.”

*An application fee of £600 is payable on the Renovation mortgage. Applicants can borrow up to 90% of the property’s value on a repayment basis (75% interest-only or part repayment and part interest only).  

Jack Woodfield
News Editor

Jack has worked in journalism for 11 years and is the News Editor for Homebuilding & Renovating, a role he has had since 2019. He strives to break the most relevant and beneficial stories for self builders, extenders and renovators, including the latest news on the construction materials shortage and hydrogen heating. In 2021 he appeared on BBC's The World at One to discuss the government's planning reforms. 

He enjoys testing new tools and gadgets, and having bought his first home in 2013, he has renovated every room and recently finished a garden renovation.