Have you ever thought about how your mortgage might contribute to your carbon footprint? And how your home's energy efficiency rating could help with your mortgage as well as your energy bills?
Probably not. There are countless things to think about when you’re trying to arrange a home loan for your next property. Finding ways to keep the deal as energy efficient and eco-friendly as you can is likely to be close to the bottom of your list.
But it is possible to do your bit for the planet by working with eco mortgage lenders. And at CLS Money, we can do all the hard work for you by sourcing agreements from companies with plenty of proven green credentials.
On top of this, we also invest in our own carbon offsetting activities to ensure our brokering services are energy efficient and wholly sustainable.
What is an eco-friendly mortgage?
The eco-friendliness of a mortgage is sometimes measured by its carbon neutrality – ie, how much carbon the lender has offset during the mortgaging process by planting trees or carrying out other similarly sustainable activities.
Green mortgages and energy efficiency
You may have also heard the term ‘green mortgage’. This describes the kind of deal that offers rewards for people who are purchasing energy-efficient properties, such as those with Energy Efficiency Certificates with a rating of A or B.
As you can imagine, it’s often easier to get this kind of deal on a new build – but customers can also be eligible for a green mortgage if they can prove that their planned renovations will bring the property’s EPC rating up to 80 or more.
Lenders will often provide lower interest rates or cashback schemes on their green mortgage agreements to encourage their customers to think more carefully about the impact that running and maintaining their home might have on the environment and choose energy efficient homes and properties with more attractive energy scores.
Banks, building societies and other lenders can also be considered ‘green’ if they ensure that their capital is only invested in eco-friendly projects and initiatives.
Who are the main eco mortgage lenders?
Green mortgages have been around for a while, not least because the UK government has been working closely with providers to develop these kinds of products as part of their Clean Growth Strategy, which was launched in 2017. There are several well-known lenders who are already incentivising their customers to purchase or move into properties that are much more environmentally friendly.
At time of writing, NatWest is providing reduced rates on its 2 or 5 year fixed green mortgage products for residential borrowers with a maximum loan to value (LTV) of 85%. Customers could also be eligible for cashback, which will be paid to their solicitor on the day they drawdown their mortgage.
Barclays is another High Street bank that is embracing the move towards sustainable mortgaging options. Its Green Home Mortgage is available to eligible customers who are purchasing a property from one of its partner house builders.
Other green or eco mortgage deals with similar eligibility criteria are available from Virgin Money, AIB, and Nationwide – and new deals are being introduced all the time.
Feel free to contact the specialist mortgage brokers here at CLS Money for more information on the products that are currently available.
Are there any carbon neutral mortgage lenders out there?
The concept of offsetting carbon through more planet-friendly mortgaging practices is one that is fairly new to our industry. But in June 2021, Danske Bank became the first lender in the UK to launch a carbon-neutral mortgage that is fully certified by the Carbon Trust.
The Trust has calculated how much carbon the company would need to offset for each deal based on their standard emissions per mortgage, plus other activities that consume energy at Danske’s offices.
To achieve carbon neutrality for their mortgage service, Danske has pledged to reduce its carbon footprint on a yearly basis and offset any remaining emissions by investing in projects that will help them balance out their environmental impact to the same degree.
How many trees does it take to make a mortgage carbon neutral?
There’s no hard and fast answer to this question, as it will very much depend on how much energy the lender is consuming, and what their waste and recycling activities look like.
As a guide, the Carbon Trust estimated Danske Bank’s emissions per mortgage at 96kg CO2e. (CO2e stands for carbon dioxide equivalent.) Taking into account how much carbon dioxide a tree can sequester over its lifetime – approximately 0.3 tonnes – this means that it will take three whole trees to offset every 10 mortgages.
There are plenty more benefits to planting more trees, too. Trees clean our air, they filter our water, and they improve our soil quality, which in turn will lead to higher yielding crops for local communities (and more jobs for the people who are harvesting them). Tree planting also actively reverses deforestation by restoring vital habitats that house diverse ecosystems.
What are we doing to become carbon neutral?
As well as ensuring we work with a large pool of eco mortgage providers, we’re also taking steps to ensure we’re working as sustainably as we can.
In November 2021, we partnered with More:Trees to do our bit to tackle climate change by ensuring a tree is planted every time we help a client with a purchase or a remortgage.
More:Trees work with tree planting partners all across the world to restore healthy forests. The platform enables businesses like ours to plant trees automatically by integrating their initiative with their software. Using this system, a tree can be planted automatically at the click of a button – and, once it’s in the ground, our clients will be notified straightaway via the CLS Money App, which is powered by Nivo.
Based on our calculations above, which have been based on the data released by The Carbon Trust, it’s clear we’re going above and beyond when it comes to offsetting the carbon impact of every mortgage we arrange.
We were one of the very first mortgage brokers to start taking part in the scheme, and we’re passionate about encouraging other industry providers to follow suit! Our Founder and Managing Director, Clayton Shipton, reinforces the importance of this kind of scheme.
Using Nivo’s instant messaging solution for internal and client communications has also helped us to cut down on the amount of paper we use on a daily basis.
How many trees have we planted so far?
Another fantastic thing about working with More:Trees is they have the ability to tell us precisely how many trees we have planted so far on behalf of our clients. You can head over to our More:Trees profile for the latest data.
The company also tracks our CO2 sequestration by telling us how many tonnes of carbon dioxide our contribution has helped to offset. Even more interestingly, their system can tell us the amount of CO2 we have offset in terms of working days, which helps us to visualise just how much of an impact we’re making!
Talk to CLS Money today to keep your mortgage carbon footprint to a minimum
If you’re interested in taking out a green mortgage on business or domestic properties, working with an eco mortgage lender, or finding a deal with a certified carbon neutral mortgage company, we’d love to help.
As an expert mortgage broker, we're regularly in touch with the specialist lenders that provide our customers with a greener mortgage. Why not get in touch with our experienced mortgage advisors today to explore your options and learn more about what’s possible? We might just introduce you to preferable mortgage rates and cheaper bills based on your existing lender criteria.
As well as answering your questions and offering all kinds of green mortgage advice, we can walk you through what it means to have an energy efficient home, applying for an energy performance certificate, and making a range of additional green improvements to your home. There are all kinds of ways to make an eco friendly home, from solar panels, double glazing, environmentally friendly heat pumps and heating systems, and energy saving insulation. Making your home greener doesn't have to cost a fortune making energy efficiency improvements; in many instances, it's merely a case of going the extra mile to lower energy consumption by being that little bit more careful with the energy we use.
CLS offers tailored advice and help to find mortgages for every kind of buyer. Whether you're looking into eco friendly homes, self build mortgages, bridging loans, you'd like to see if you can lower your mortgage repayments, or hoping to invest in a buy to let property, we're here to help with every one.
Even if you don’t end up taking out a mortgage with an eco provider, you can rest assured that, thanks to our tree initiative, CLS Money will be offsetting enough CO2 on your behalf to ensure your agreement is totally carbon neutral!