NatWest’s launch of a green mortgage last week means there are two big-hitting lenders competing in the same space.
Barclays was the first UK lender to launch a green mortgage in 2018, so it’s healthy that two lenders could potentially drive rates down.
There’s an economic argument for these types of mortgages, as living in energy efficient properties can lower the cost of heating bills, giving homeowners more disposable income to spend on their mortgage.
In essence then, you could argue that a buyer of an energy efficient property is marginally safer for lenders.
That’s not to mention the green argument for making these mortgages more common, as the government has pledged to upgrade all homes in the UK to Band C standard by 2035. By encouraging consumers with green mortgages lenders can be seen to do their bit.
As it stands the rates of the two mortgages are competitive but not outstanding.
NatWest offers 2 and 5-year fixes between 60% and 85% LTV with rates starting at 1.33%, with a product fee of £995 and £250 cashback.
Meanwhile Barclays offers a 5-year fixed rate Green Home mortgage at 3.14% at 85% LTV, 0.01% cheaper than its Great Escape range at 85% LTV.
Clearly having these two lenders on board can help drive competition in the market – perhaps we could eventually see a green buy-to-let mortgage to complement the residential products already on the market.
Ryan Bembridge, Editor, PropertyWire
