Building Society launches new Retro-Fit Mortgage that aims to encourage homeowners to improve the energy efficiency of their properties
Saffron Building Society has this week officially launched its first 'green' finance products, debuting a new retro-fit mortgage and dedicated green savings account.
The company announced that the new mortgage offer would provide an interest reduction reward for the remaining time of the two-year fixed rate, if the borrower can prove the upgrades made to the property have improved its Energy Performance Certificate (EPC) rating by one band, to a minimum of Band E.
The launch was accompanied by a new Enviro Saver account that offers annual interest of 0.35 per cent with an additional 0.10 per cent donated to environmental charities. Savers can choose from a list of selected charities for each 12-month interest period.
The news follows the recent publication of a series of studies highlighting how green mortgages and other finance products could help drive investment in building upgrades and slash emissions across the UK's housing stock.
The government and industry-backed Green Finance Taskforce also published a series of recommendations last year, setting out how the finance sector could accelerate the development of targeted green finance products, while the government has signalled its support for the development of green mortgages.
"I was made aware of the government's green financing scheme last year," said Laura Bright, product development manager at Saffron. "Having studied the guidelines I was keen to create green products from Saffron that can help to further enhance the government's strategy, whilst also taking the first step to a greener future for Saffron Building Society and our loyal customers.
"Each product offers a little incentive to encourage borrowers to think of the environment, whilst giving a little something to the charities working so hard to save our planet."
The new offerings were welcomed by Matthew Fleming-Duffy, a director of independent mortgage broker and green mortgage specialist, Cherry Mortgage & Finance.
"It got drowned out given the understandable focus on Covid-19 in the media, but this week the UK finally got a green mortgage product that is competitively priced, widely available and fit-for-purpose," he said. "With scientists and medical professionals increasingly of the view that air pollution significantly worsens the effects of Covid-19, the Saffron should be applauded for firmly putting green mortgages back on the agenda.
"There are millions of homes that need to become more energy efficient if the UK is going to meet its ambitious net zero emissions targets by 2050, and while the Ecology Building Society are doing their best to get the message out, we need far more lenders to embrace green mortgages."
He added that the promise to reduce the mortgage interest rate reduces by 0.10 per cent for the remaining time of the two-year fixed rate for those undertaking home improvements was "particularly competitive when you consider the interest rate on the product starts at 1.47 per cent, is available up to 80 per cent loan to value and comes with a free valuation".
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