Eco-Friendly Home Mortgages
Eco-friendly homes are increasingly popular, with a range of appliances and features that help them support the local environment. Our guide to eco-friendly mortgages showcases some of the opportunities to reduce your mortgage costs or find a suitable lender for your environmentally conscious home.
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Based on your yearly income,
you may be able to borrow
Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.
Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.
Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.
Eco-Friendly Home Mortgages
Living eco-friendly is a growing trend, and more people are considering the impact of the type of property they choose to live in. Many eco-friendly homes are built from recycled materials, natural fibres, or use alternative insulation techniques.
The challenge can be that such a home is usually considered non-standard, and may be difficult to borrow against with a high street lender.
Revolution Brokers works with a vast range of specialist and niche lenders, many of whom do not advertise mortgage products directly to the public that are ideal for an environmentally friendly property.
Get in touch with the team on 0330 304 3040, or email us at [email protected] to start your mortgage application process.
Is There a Specific Type of Mortgage for an Eco-Friendly Home?
There aren't necessarily different mortgage products, but you can find lending designed for non-standard properties that cover an eco-friendly house.
Mainstream lenders often struggle to mortgage a non-traditional home, mainly due to the difficulty of valuing the potential resale value, and therefore specialist lenders are often the best bet.
In some cases, you need a larger deposit of around 20% to 30%, but a lot depends on the lender's policies, and what sort of property you wish to buy.
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What Sort of Home Qualifies for an Eco Property Mortgage?
Again, there isn't a fixed classification. Any property designed to have minimal impact on the environment, or is built with contemporary materials and techniques that reduce the carbon footprint could be considered an eco property.
Materials might include:
- Organic materials grown without pesticides or herbicides.
- Recycled glass, wood, metal and plastic.
Can I Get a Self-Build Mortgage for an Eco Home?
There aren't a vast number of eco-homes on the market, so in many cases, you might need a self-build mortgage to construct your own property.
In that situation, you'll need to consider:
- Finding a builder or contractor with experience building eco-homes.
- Creating a realistic budget for the build costs.
- How long the construction project is intended to take.
Once approved for a loan, the build is surveyed regularly, and funds released in pre-agreed stages once that part of the project has been signed off.
The benefit is that you only pay interest on the amount you have drawn down so far, and therefore don't need to pay interest for the full facility from the start of the agreement.
Usually, you don't make any repayments until after the build is complete.
How Large a Mortgage Can I Get on an Eco-Friendly Home?
The maximum mortgage you can get depends on lots of factors:
- Credit rating.
- Type of property.
- How much you earn.
- Your age.
- Your income and stability of employment.
Most lenders will offer up to around four times your annual income, including both salaries if you are applying for a joint mortgage with a partner. Therefore, if you earn £25,000 and apply for a sole mortgage, you would probably be able to borrow up to £100k.
Some lenders offer discounts on interest rates for energy-efficient properties, reducing the cost and lowering the affordability benchmarks.
What Deposit Value Do I Need for a Mortgage on an Eco Property?
Lenders require different levels of deposit depending on the risk profile of the application. For example, if you are nearing retirement, a first-time buyer, or are self-employed, you'll usually need a higher deposit.
Typical Loan to Value maximums are around 80% on this type of property, so you'd usually need around a 20% deposit.
Which UK Mortgage Lenders are Best for Eco-Friendly Home Loans?
Many high street banks will not mortgage an unusual property, but many more niche lenders will.
The key is to work with an independent broker who can review your borrowing requirements, assess your income, and match your mortgage needs with the most suitable lender.
Professional Advice with Eco Home Mortgages
If you would like to buy or build an eco-friendly home, it's essential to have the right lending in place. Contact business loan broker on 0330 304 3040, or email us at [email protected] for professional advice from a whole-of-market broker with years of experience in the eco-home lending sector.
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As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.
We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.