Your Business and Industry
Is your client eligible for Green mortgage and not aware?
Around 40% of homes in the UK have an Energy Performance Certificate (EPC) rating of C or above already, but are your borrowers considering a Green mortgage when they remortgage or purchase?
Many borrowers have a wider range of products available to them than they may realise, when their property has an EPC rating of C or above. Research from Mortgage Advice Bureau showed that 64% of homeowners don’t know what their EPC level was.
The term 'Green mortgages' covers a broad range of mortgage products, which normally offer an advantage or reward to your client, if the property meets certain requirements of energy efficiency. Different lenders offer different rewards and also have different criteria for their definitions of 'Green' when it comes to mortgages for Green homes. At Foundation, the products available for 'Green' qualifying properties may have an advantageous rate, or fee or maximum loan amount, or another type of reward - please refer to the individual products on the guide.
You can check the EPC rating of any property using the government website.
Who might it be for?
Many lenders may require certain features on the property for it to qualify, such as solar panels or air source heat pumps, however, at Foundation, the criteria is deliberately simple: we only stipulate that the property have an EPC of C or above.
Green mortgage products are available for owner-occupied properties as well as buy to let ones. For owner-occupiers (residential borrowers), our Green mortgage range is applicable to most property types, although some listed property buildings cannot be eligible due to their EPC rating status. If your client has a listed property, please refer to our criteria guide for details.
On the Buy to let side, Green mortgage products are available for a wide range of property types such as for standard buy to lets, green mortgages for HMOs, MUBs, Green mortgages for Short term lets, as well as Green mortgages for Expats.
Green mortgages have become considerably more relevant to landlords in the past 2 years since the government consultation paper that all properties entering a new tenancy must be EPC level C or better by 2025, and properties with existing tenancies must be improved to that standard by 2028. For many landlords, the cost of bringing multiple properties in their portfolio up to standard in time for the deadline may be considerable. Of the 700 landlords we surveyed in Q4 of 2022, some 62% currently say they intend to use savings to make the required changes to their properties, 10% of landlords would take out a loan to fund any works, 8% would release equity from their portfolio, and 6% would seek a further advance from their lender.
For many landlords, their mortgage advisor is the only person having this conversation with them to help them plan their strategy for funding these properties over the next 5 years.
Early remortgage options
Another popular feature of the Foundation home loans Green mortgage range is that we allow 'Day 1 remortgages', which means that your client can remortgage to us without having to wait the normal 6 months required for other mortgage types. This can be helpful for many situations, but particularly targets the borrowers who have purchased a property, carried out improvements, and would like to refinance as quickly as possible if they chose more costly lending such as bridging or unsecured loans at the outset.
Product choice
It is also worth noting that Green products come in all shapes and sizes to suit your clients' situation, such as fixed rates for 2 or 5 years, or discount rate mortgages which have no early repayment charges (please see current buy to let product guide or residential product guide for what's available at the moment).
Finally, we are pleased to say that Foundation Home loans is exclusively an intermediary-only lender, which means that we fully support you as a mortgage intermediary to provide expert advice to mortgage borrowers.
If you think that any of your clients' properties may have an EPC of C or above, why not click to also view the Green options on your sourcing system this week, to see what other products they may have been missing?
FOR INTERMEDIARIES ONLY
