Will mortgage lenders offer cheaper fixed rates or cash back if a property has an A to C energy rating?

by Aaron Strutt

Nov 10 2024

Banks and building societies increasingly offer borrowers cheaper mortgage rates or cash back when their property has a good energy rating, as shown on an energy performance certificate (EPC).

More lenders also offer cheaper additional borrowing rates or cashback to those who improve their property's energy rating.

While it is still possible to secure mortgages on properties with poorer energy efficiency ratings, lenders do more to tempt borrowers to buy greener homes or make home improvements. If a property is in poor condition and needs improvement, a lender's property valuer may note this, which could affect its value. This may be a good price negotiation point from a buyer's perspective. 

Aaron Strutt, product director at Trinity Financial, says, “It is not unusual to see lenders offering the most competitively priced rates to borrowers buying or remortgaging with an EPC rating between A and C. Increasingly, an A to B rating is required. 

"NatWest tends to have decent fixed rates with a good EPC rating, and more lenders are targeting this part of the market. HSBC offers decent cashback, too."

What energy efficiency rating does my property need for a cheaper mortgage rate?

Mortgage lenders are keen to issue more mortgages to borrowers buying properties with an A to C energy performance certificate rating. 

This is partly due to pressure from the UK government to make our housing stock greener and tackle global warming. According to the government's latest greenhouse emissions study, 15% of carbon emissions come from homes.

Halifax Green Living Reward Scheme 

Halifax, the UK's largest mortgage lender, recently launched a Green Living Reward Scheme. Under this scheme, customers who carry out improvement works on their properties can get cash back.

The lender offers £2,000 cash back when adding an air—or ground-source heat pump and £500 cash back when installing a biomass pellet boiler or solar thermal heating system. There is also cash back for solar panels, insulation, and rated double/triple glazing when replacing single glazing. Customers will need to open a Halifax current account to qualify, and there are time constraints to claim the cashback. 

NatWest's Green mortgages are often the most competitively priced fixed rates

NatWest for Intermediaries: Green mortgages are available for all residential and buy-to-let properties with an energy performance rating of A or B and specific new-build developer properties. These rates are available for property purchases, porting and remortgage applications.

To qualify for NatWest's Green Mortgages, either a valid Energy Performance Certificate (EPC) listed on the registers detailed below with a rating of A or B or a property from our list of agreed-upon new-build developers must be eligible. No other EPC data registers or documentation, such as a Predicted Energy Assessment (PEA), will be accepted.
Properties with only a proposed or anticipated EPC Rating of A or B are not eligible.

Approved New Build Developers from whom an EPC is not required:
Barratt Homes, Berkeley Group, Crest Nicholson, L&Q, Keepmoat Homes, Galliard Homes, Bellway and CALA Homes.

What is Halifax's Green Mortgages policy?

Halifax has launched a green mortgage range that offers £250 cashback for those buying or remortgaging a property with an Energy Performance Certificate (EPC) or Predicted Energy Assessment (PEA) rating of A or B.

The deals are available on selected Halifax mortgage products and apply to first-time buyers, homemovers, shared-equity, shared-ownership, and new-build mortgages. They are restricted to those borrowing less than 85% loan-to-value on main residences only.

HSBC Energy Efficiency Home products (EEH)

HSBC for Intermediares offers Energy Efficiency Home products for borrowers purchasing flats or houses with an A or B rating. The cashback ranges from £250 to £1,700. 

Santander Green Mortgages

Santander UK has introduced a range of discounted rate mortgages for residential and Buy to Let customers remortgaging a property with an EPC rating of A or B. The products, available exclusively via brokers on mortgages from 60-85% loan-to-value, and offering a discount of 0.10% on standard remortgage rates.

Nationwide's energy-efficient home policy

Most homes sold in the UK need an Energy Performance Certificate (EPC). This tells you how energy efficient, or green, the home is. Each property is given a score - the higher the number the more energy-efficient the property. This is calculated using a Standard Assessment Procedure (SAP).

If you're buying a home with a Nationwide mortgage, they will reward you with:

• £500 cashback, for a property with a score of 92 or above.
• £250 cashback, for a property with a score of 86 to 91.

Nationwide won't be able to tell if your new property’s EPC document is out of date, so make sure you check this with the seller before you complete it. Nationwide is not responsible for the registration or accuracy of the EPC.

What about buy-to-let mortgages? 

Some buy-to-let lenders offer lower mortgage rates to landlords buying or remortgaging energy-efficient properties. BM Solutions is the most significant player in the market.

How can I find out the energy efficiency rating of my property?

If you are unsure what your property's energy rating is, you can find out by clicking on this link: https://www.gov.uk/find-energy-certificate. If your property does not have an energy certificate or has expired, you can get a new one.

Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire. 

The information contained within was correct at the time of publication but is subject to change.

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