Cheaper mortgage rates for energy efficient householders

The government has launched a £5m fund for the financial sector to develop green mortgages and a £10m innovation fund to cut the costs of retrofitting the UK’s housing stock

Householders could be rewarded with cheaper mortgage rates by improving the energy efficiency of their homes as part of a new Green Finance Strategy.

The government has announced a £5 million ahead of the launch of the Strategy to help the financial sector develop green home finance products like green mortgages.

Green mortgages give customers discounted mortgage rates after they have upgraded the energy rating of their homes.

The government has also launched a £10 million innovation fund for companies to design innovative ways of reducing the cost of retrofitting Britain’s old housing stock, which could include assembling parts of buildings like pre-fabricated roofs or facades off-site and quickly fitting them to homes, minimising disruption for homeowners.

The announcement comes after the UK became the first major economy in the world to pass a law for net zero emissions by 2050.

BEIS says tackling domestic emissions by improving the efficiency of the 17 million homes in Britain with an Energy Performance Certificate (EPC) rating below Band C will be essential to achieving the goal.

Homes are currently responsible for around 15% of the UK’s carbon emissions.

Energy and Clean Growth Minister Chris Skidmore said: “To fulfil our world-leading commitment to reach net zero emissions by 2050, we need an overhaul of our housing stock to tackle the disproportionate amount of carbon emissions from buildings.

“By rolling out more green mortgages and reducing the costs of retrofitting older homes, we’re encouraging homeowners to improve the efficiency of their homes and save money on their energy bills, helping to ensure everyone has access to a warm and comfortable home.”

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