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Eco mortgage

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 6, 2023

Mortgages for properties that are eco friendly in the UK

We receive several enquiries from people looking for an eco-home mortgage and a green mortgage for an energy-efficient home.

Many buyers are now conscious of the environment, carbon footprint and energy efficiency to lower their bills. People want to live in properties made from recycled plastics, timber, or insulated panels.

Eco homes have been a popular option for borrowers. There is a small number of mortgage lenders, so this can make it more challenging to get a mortgage.

We work with specialists mortgage brokers in the UK who are experienced in arranging mortgages for eco-homes with banks and other lenders.

This guide will provide all you need to know about eco-property mortgage loans.

Enquire below to speak with mortgage brokers who can find the best eco mortgage deals.

We have a few mortgage providers lending green mortgages for energy-efficient homes.

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Is there a mortgage for eco-properties?

Yes! These loans are more complicated than traditional residential mortgages and require specialist lenders.

Lenders may be reluctant to mortgage eco properties if they fall under the “unusual property” category. Energy-efficient homes may not be as easy to sell as standard residential properties.

Most lenders want to ensure that a property is a suitable security for borrowers, so they will be able to resell it in an emergency or a case of missed mortgage repayments.

However, lenders may still be willing to lend you money if the circumstances are right. While some lenders may require a higher deposit, others may only require 20-30%. However, this is not always the case for all lenders.

Click the link below to begin a green mortgage with an online mortgage advisor. We provide mortgage advice and can discuss the energy efficiency rating and the energy performance certificate EPC required. We will then introduce you to a suitable mortgage lender.

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What is an eco-property?

An eco-house is a property designed to make the most negligible environmental impact possible on the carbon footprint.

They are often built with materials and technology that lower the carbon footprint and increase the property’s energy efficiency. They will come with an energy performance certificate EPC and lower energy bills.

However, a property with solar panels can cause complications when getting a mortgage. Read our guide to learn more about buying a house with leased solar panels.

With eco housing becoming more popular, more homeowners opt to buy properties with green improvements, solar panels, installation, or earth-sheltered dwellings.

What materials are best for building an eco-home?

An eco home is made up of organic materials, which are materials that can be grown without toxic pesticides, herbicides, or recycled products containing metal, glass, or plastic.

Eco homes can be constructed with materials not commonly used in the construction industry. They can therefore be classified as “non-standard construction”.

Establish online mortgage advisor here to discuss green mortgages and energy efficiency.

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Eco-home mortgages for self-build

A self-build mortgage may be more appropriate if you are planning to build an eco property rather than buying one.

Also, you will need to find a builder with experience building eco-friendly properties. Before signing a contract, it is a good idea to research builders and look at their past work.

Once you have found a builder for your eco-home, they will give you an estimate of how much it will cost to build it. The builder will then break down the cost of each job or stage.

What is a self-build eco loan?

After each stage, an independent surveyor will verify that all work has been completed so that your lender can release funds to pay the builder.

A few construction loan companies will only charge interest on the monthly amount you take. Once the build is completed, you can start to repay the loan.


What amount can you borrow to get an eco-home green mortgage?

Many factors will affect the amount of money you can borrow for an eco-house mortgage.

  • Your credit history
  • The property type
  • Your income
  • Your age
  • Your employment type

Most lenders will lend up to four times your joint or sole income if you pass their affordability tests. If you have a single annual income of £25,000 or more, the lender might consider lending you £100,000.

A lender might consider lending £200,000 to a couple with a combined annual income of £50,000.

Specialist eco property lenders offer a discount on the Standard Variable Rate to borrowers who purchase energy-efficient properties.

It is essential to get the right mortgage advice to fully understand how much you can borrow to finance an eco-green mortgage. For assistance and guidance with your application, contact an advisor.

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What deposit is required to buy an eco-home?

Many factors will affect the amount of deposit a lender requires from you, whether you are a first-time buyer, self-employed or a senior borrower.

However, some eco mortgage lenders have a loan to value (LTV), which is 80% of the property’s value. This would require a 20% deposit.

This could be a £40,000 deposit and a £160,000 loan to purchase an eco property of £200,000.

But, each lender is unique, and you will need to speak to an expert broker to determine how much deposit you need for each eco mortgage provider.


Where can I find the best eco-build mortgage lenders?

It doesn’t matter if some lenders are less likely than others to approve a mortgage on an eco-property; this does not mean it is impossible.

Our brokers have helped people find mortgages even though they were previously declined.

Specialist lenders are available in the UK to deal with eco-property mortgages. Our advisors have access to them.

They have years of industry experience and know which lenders best suit each individual.

Each mortgage application is unique. We only work with brokers that understand this and will take the time to help you find the right lender for your needs.

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What can I do to help an eco-property mortgage broker?

An experienced broker with experience in UK eco mortgages can:

  • You can negotiate the terms of your mortgage, including interest rates and monthly payments.
  • You can manage the entire process from beginning to end
  • Send any contracts or documents to the appropriate places.
  • To ensure that you are fully informed about the pros and cons of each eco-mortgage offer, we will explain how they could impact your financial situation.
  • We offer bespoke advice regarding eco-properties.

Good advice is essential. Our team has helped over 120,000 people to get a mortgage and energy-efficient green mortgages.

Often, those we assist have received incorrect or bad advice that has led to them being denied green mortgages.

Talk to an expert today for green mortgages.

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