Saffron Building Society has launched a ‘green’ mortgage for borrowers concerned about environmental issues following a Government campaign Green Finance Strategy, part of which encourages providers to launch ‘green financial products’.
The Retro-Fit Mortgage is designed to encourage borrowers to upgrade current housing stock to a better energy efficiency rating (EPC). If updating a home, the mortgage offers an interest reduction reward of 0.10% for the remainder of the two year fixed rate, when the borrower can prove that any upgrades made to the property, have improved the EPC by one band, to a minimum of a quite achievable E.
The initial interest rate is 1.47% fixed until 30/11/2022 followed by a 1% discount off the standard variable rate (SVR), currently 5.39% variable for the rest of the mortgage. Arrangement fee is £999 but other fees may apply. Loan to value (LTV) is 70- 80% LTV maximum. A free valuation is included.
The Retro-Fit Mortgage is available as Repayment (Capital and interest) up to 80% LTV or interest only up to 70% LTV, with a repayment vehicle in place.
Saffron has also launched the Enviro Saver, online savings account; minimum deposit £10, maximum balance of £500,000. Interest 0.35% annually with an additional 0.10% donated to an environmental charity chosen by the customers from a list of nominated environmental charities, which can be changed each year.
Laura Bright, product development manager at Saffron Building Society said: “I was made aware of the government’s green financing scheme last year. 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.”
Matthew Fleming-Duffy, director of mortgage broker Cherry Mortgage & Finance 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 is doing its best to get the message out, we need far more lenders to embrace green mortgages.
“The Covid-19 pandemic has put the nation’s health firmly on the radar and so now is the perfect time for the major high street lenders to start offering green mortgages.”