"We hope that our new Renovation mortgage will incentivise more people to consider retrofitting their home, which will be critical in the fight against climate change."
The Society has introduced a new variable rate renovation mortgage with an initial rate of 3.65% while the renovation works are underway. On completion of the works borrowers will be eligible for a discount of 0.25% for every energy rating step improvement based on the EPC of the property (up to maximum discount of 1.50%).
For example, if a property is improved by four EPC steps from EPC F to EPC B, a discount of 1.00% applies resulting in a variable rate of 2.65% for the remaining term.
Applicants can borrow up to 90% of the property’s value on a repayment basis (75% interest-only or part repayment and part interest only).
For homes renovated to the exacting Passivhaus EnerPHit standard, an enhanced discount of 1.25% is applicable on completion of the works with a resulting variable rate of 2.40% for the remaining term of the mortgage.
Daniel Capstick, Ecology’s mortgage manager, commented: “Now more than ever it’s important that lenders play an active role in a sustainable recovery, helping to build back better. We’ve been leading the way on green mortgages for nearly 40 years and we hope that our new Renovation mortgage will incentivise more people to consider retrofitting their home, which will be critical in the fight against climate change.”
Russell Smith, MD of Retrofit Works, added: “The sheer scale of the retrofit task is huge requiring one home to be retrofitted every 35 seconds between 2020 and 2050. Ecology has been a long-standing provider of mortgages for whole house retrofit and, given the desperate need for innovative finance, it’s good to see them renewing their focus on supporting renovations. We’d like to see other lenders joining Ecology, as part of a Government led National Retrofit Programme, to ensure that finance isn’t a barrier to improving the energy of our homes.”
