Ecology Building Society has raised the entry criteria for its range of green mortgages for self- and custom-build in a drive to encourage and accelerate the construction of energy efficient homes to help meet the UK’s net-zero ambitions.
The sustainable lender has increased the minimum energy rating level (or Standard Assessment Procedure (SAP) rating) to 88, for self-build applicants to achieve when their build is completed. By increasing the entry level to 88 from 85, Ecology continues to lead the way in supporting construction of the most energy efficient buildings, which is critical if we are to meet our Paris commitments and tackle the climate and ecological crisis.
Building Regulations require that a SAP calculation and a predicted ‘on construction’ Energy Performance Certificate (EPC) is submitted for new dwellings prior to building work commencing.
Ecology began the year with its strongest ever pipeline of lending for low impact homes. The Society is continuing to work with potential borrowers, signposting them to sources of help to improve their build quality to meet the new standard.
Ecology’s self-build mortgage starts with an initial standard variable rate of 4.15 per cent while the construction works are underway. On completion of the building works borrowers are eligible for a discount of up to 1.25% based on the EPC) Energy Performance Certificate. This Sustainable Homes version of Ecology’s pioneering range of C-Change discounts is designed to incentivise and encourage borrowers to build their home to a better energy efficiency rating leading to a long- term saving in both energy and borrowing costs.
For example, if the finished build is A rated EPC a discount of 0.75% applies giving a variable rate of 3.40% for the remaining term of the mortgage. An application fee of £799 is payable. Applicants can borrow up to 80% of the property’s value on a repayment basis (655% interest-only or part repayment and part interest only).
For homes built to the exacting Passivhaus standard, an enhanced discount of 1.25 per cent is applicable on completion of the works with a resulting variable rate of 2.90 per cent for the remaining term of the mortgage.
The decision to increase the entry level for self- and custom-build comes at a time when the Government is recognising the urgent need to reduce the carbon impact of house building and has stated that new homes much reduce carbon emissions by 75% by 2025.
The Society also specialises in providing mortgages for renovation projects and in many instances will welcome projects that standard lenders may not accept including where the property is deemed not to be habitable or fallen into disrepair. Ecology offers flexible staged payments based on the needs of the borrower and will consider lending on homes in any condition, as long as the works required improve the energy efficiency of the property. The Renovation Mortgage is also available where a property is being purchased for renovation.
Ecology’s mortgages are funded by its members who save with Ecology in the confidence their money is being used to have a positive environmental impact.
Daniel Capstick, Ecology’s Mortgage Manager explains, “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 40 years and we hope that the changes to our lending criteria will result in our borrowers building more energy efficient homes, which is critical in the fight against climate change.”
