Mortgage rate cut for energy efficient homes under government-backed trials
£4.1 million investment in 26 innovative green finance projects.
The UK government has initiated a series of trials to lower mortgage rates for homeowners who enhance the energy efficiency of their homes, supported by a £4.1 million investment in 26 innovative green finance projects. These initiatives aim to simplify the process of boosting the energy efficiency of UK homes by providing upfront funding. The funding will support a variety of products, including mortgages that reward energy-efficient upgrades and loans for installing heat pumps. Homes that are retrofitted as part of this program could save over £460 annually on utility bills.
Perenna Bank is set to receive over £193,000 in government funding to develop a long-term, fixed-rate mortgage that encourages customers to make their homes more energy-efficient by offering reduced mortgage rates. In another trial, buy-to-let landlords will be able to add the cost of energy-efficient upgrades to their mortgages, allowing them to borrow the necessary funds and spread the cost over their monthly repayments. Ashman Bank Limited will receive £200,000 to design and develop this innovative mortgage product.
These projects are part of the government's broader effort to enhance the energy efficiency of homes across the country, helping families save on energy bills and contributing to the reduction of emissions. The funded initiatives also include services for accessing property equity, bespoke energy efficiency products, and services that connect homeowners with retrofit installers and green finance providers.
The 26 Green Home Finance Accelerator projects, following a 6-month discovery phase, will be eligible to apply for larger grant awards ranging from £200,000 to £2 million to pilot their green finance products and services. This funding is part of the £20 million Green Home Finance Accelerator, funded through the £1 billion Net Zero Innovation Portfolio, aiming to upgrade as many homes as possible to an Energy Performance Certificate (EPC) band C by 2035.