Green mortgages

If you’re buying a new-build home or are planning to make energy-efficient improvements to your property, a ‘green’ mortgage might be worth considering.

Types of green mortgages

There are three main types:

• Rate reductions: these mortgages are usually available to people buying or remortgaging properties with Energy Performance Certificate (EPC) ratings of A or B. Lenders offer small reductions on their standard mortgage rates or cashback incentives.
• Additional borrowing for green home improvements: these deals are available to homeowners making energy-efficient home improvements, such as replacing a gas boiler with an air source heat pump. Lenders will either offer a reduced rate on the extra money you borrow, or cashback or a lower mortgage rate as a reward after the work is complete. 
• Enhanced borrowing: some lenders will offer enhanced income-to-loan ratios for properties with Energy Performance Certificate (EPC) ratings of A or B.

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Which lenders offer green mortgages?

The green mortgage market has grown significantly in the past few years, rising from just four products in 2019 to over 90 in 2025, according to data from the Green Finance Institute. In its latest analysis, almost 60 of these products are residential mortgages, with the other green products being lifetime and buy-to-let mortgages. 

Green deals may still remain a very small proportion of the overall mortgage market, but an extensive list of lenders do offer some form of green mortgage.

The following banks and building societies offer deals: Accord Mortgages, AIB, Barclays, Bath Building Society, Chorley Building Society, Co-Operative Bank, Coventry Building Society, Danske Bank, Dudley Building Society, Ecology Building Society, Foundation Home Loans, Furness Building Society, Gatehouse Bank, Halifax, Handelsbanken, Hinckley and Rugby Building Society, HSBC, Kensington Mortgages, Leeds Building Society, Leek Building Society, Lloyds Banking Group, Nationwide Building Society, NatWest Group, Newbury Building Society, Octopus Home Finance, Perenna, Progressive Building Society, Quantum Mortgages, Skipton Building Society, Suffolk Building Society, Swansea Building Society, Tandem Bank, TSB, Virgin Money and Yorkshire Building Society.

Are green mortgage rates competitive?

Green mortgages for energy-efficient homes

Participating lenders usually offer small reductions on their standard mortgage rates. Green mortgage rates are often around 0.1% or 0.15% below the lender's standard rate.

Some green rates are increasingly market-leading or very close to the best deals available.

However, the competitiveness of green mortgage deals still vary significantly depending on the lender. 

This means you should still shop around - don’t assume a mortgage is cheap just because its rate has been reduced. 

Another incentive a lender may use to tempt a borrower is cashback. The lender will usually reward homes that have an EPC rating of A or B with this type of reward.

The table shows the lenders that are currently offering rate reductions or cashback incentives on their green mortgages as well as the assessment criteria they use.

• Find out more: best mortgage rates

Green mortgages for additional borrowing

These deals tend to be more attractive, but banks only offer them to existing customers.

Lenders that provide this type of green mortgage tend to offer additional borrowing rates well below the cheapest personal loan rates, and some even offer interest-free additional borrowing for specific renovations. Some providers will also offer enhanced borrowing for energy-efficient homes. This is essentially when a provider allows you to borrow more money by increasing the income-to-loan ratio it will lend you. 

So if you’re thinking about making green improvements, it’s worth looking into whether your lender offers a preferential rate.

The table shows the lenders that are currently offering products that allow additional borrowing and the assessment method they use for applications.

• Find out more: home improvement advice from Which?

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How green are green mortgages?

It’s important to note that these mortgages aren’t ‘green’ in themselves. A range of lenders offers them, and neither the bank nor the mortgage is required to conform to any environmental, social or governance (ESG) criteria.

Instead, green mortgages either incentivise you to buy an energy-efficient home, or make it more cost-effective to make energy-efficient improvements to your current property. 

The outcome should be a home that is cheaper to run and has greater appeal when you come to sell it. 

Alternative ways of funding green home improvements

Green mortgages are an alternative to some of the more conventional ways of funding home improvements, such as using savings, taking out a personal loan or using a 0% credit card.

There are some other grants available if you want to make specific energy-efficient improvements, such as upgrading your boiler or adding insulation to your home.

• Find out more: energy grants for your home