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Homeowners in favour of reduced mortgage costs based on energy performance, according to Foundation Home Loans research

According to research by Foundation Home Loans, the intermediary-only specialist lender, 67% of all homeowners, or those who want to become homeowners, would consider a lower mortgage rate based on their property’s Energy Performance rating an appealing element when looking at product features.

The research, carried out by BVA BDRC on behalf of Foundation, interviewed 300 individuals regarding their housing aspirations and circumstances during August last year. A number of questions focused on the energy efficiencies of existing housing stock, what it would take to get homeowners to make improvements, and whether ‘Green mortgages’ might have an appeal for those making such improvements or buying higher-rated properties.

The research also found 48% of homeowners and prospective homeowners would consider improving the Energy Efficiency rating of their property in order to access a better mortgage product, if it paid for itself in five years. 5% said they would make green improvements to their property if it paid for itself in 15 years and 24% said they plan to improve their property’s energy performance regardless.

The focus on the potential allure of ‘Green mortgages’, with more competitive rates for properties with a better EPC rating, appears to be growing with homeowners now inclined to improve the energy efficiency rating of their home, particularly if such improvements might pay for themselves within a period of time.

Foundation’s latest F1 Green ABC+ fixed-rate mortgages for residential owner-occupiers come with tiered cashback between £250-£750 and two-year fixed rates between 3.04% to 3.94%, depending on loan to value and whether their property has been issued with an Energy Performance Certificate (EPC) rating of A, B or C. They are available for purchases and remortgages on a capital and interest repayment basis only up to 85% LTV and with a flat product fee of £595.

George Gee, Commercial Director at Foundation Home Loans, said:

“There’s no doubting we’re going to be seeing a much greater Government focus on the UK’s housing stock, how its energy efficiency ratings can be improved, and how that might help the UK meet its carbon emission targets.

“To that end, there appears to be a far greater appreciation of energy efficiency within the home from individuals, and it’s positive to see two-thirds of all those polled saying a mortgage product with rates based on EPC ratings would be an appealing part of the overall product mix.

“At the same time, with such incentives in place, more people are likely to consider improving the energy efficiency of their properties and it’s therefore important we have product availability that can support those improvements, whether for owner-occupiers or landlords.

“Our range of Green ABC products has been designed to support those who are either wanting to improve their existing property or are purchasing investment properties that meet the very highest ratings. As an industry, we need to continue to keep this front and centre, and ensure we can offer advisers and their clients these ‘Green’ options, which can provide a significant cost-saving for borrowers.”

For more information on Foundation Home Loans, please visit:

Published: 04 January 2022