Nationwide has introduced a new 0% Green Additional Borrowing product that gives its mortgage customers the opportunity to borrow up to £15,000 at a 0% interest rate for two or five years to make their homes more energy efficient. The new Green Additional Borrowing product is designed to help homeowners lower their carbon footprint and their energy bills by funding green home improvements, such as installing home insulation, solar panels or air source heat pumps.
The mortgages, which are now available, will be open to up to 5,000 households with a Nationwide mortgage who can borrow up to 90% of their property value (LTV). Nationwide estimates that the interest-free deal could save borrowers up to £1,530 over the term of the mortgage.
The mortgage can only be used for non-structural, energy-efficient home upgrades, such as solar panels, air source heat pumps, window upgrades, boiler upgrades, cavity wall insulation, loft insulation or EV electric vehicle chargers. Borrowers can choose any local or national contractor or supplier for the work.
Henry Jordan, director of home at the Nationwide Building Society, stated: “Residential properties are one of the biggest sources of emissions and we need more incentives to encourage households to take action.”
“One of the main obstacles to making homes more energy efficient is the upfront costs and the long payback period of making such changes.”
“We want to see if offering zero per cent interest will motivate our members to make the necessary green home improvements, where the costs of finance may have previously deterred them.”
The deal, is also open to landlords who have a buy-to-let mortgage with Nationwide’s subsidiary, The Mortgage Works (TMW). The mortgage can be used for non-structural, energy-efficient home upgrades, such as solar panels, air source heat pumps, window upgrades, boiler upgrades, cavity wall insulation, loft insulation or EV electric vehicle chargers.
The product aims to help landlords meet the UK government’s target of achieving an Energy Performance Certificate (EPC) rating of C or above for all rental properties by 2028. New tenancies must reach these standards by 2025.
Hannah Bashford, director at Model Financial Solutions Limited, said: “This is a great initiative and will be a good step forward to helping to make homes greener. The amount in some cases will not cover the full cost [of the work] but will provide an affordable option for part of the funding and will hopefully encourage more people to look at their options.”
Why is the 0% interest Green Additional Borrowing scheme important?
Nationwide recognises that the UK’s 29 million homes are a major source of greenhouse gas emissions, contributing to about 16 per cent of the country’s total. The mortgage lender wants to help lower these emissions by encouraging homeowners to make their properties more energy efficient. Nationwide admits that it has limited power to influence the environmental impact of the homes it finances. However, it hopes that by offering 0% interest on its Green Additional Borrowing products, it can motivate members to invest in green home improvements, thus creating a positive change.
Other green initiatives in place by different banks in the UK
The Perenna Bank is leading one of the projects funded by the Government to develop a long-term, fixed-rate mortgage scheme. This unique scheme aims to incentivise homeowners to make their homes more energy efficient by offering lower mortgage rates.
Another project supported by the Government is run by Aviva Equity Release UK, which is creating a service for homeowners to access their property’s equity through a personalised lifetime mortgage. This would allow homeowners to use the money to fund energy efficiency upgrades for their homes.
A third project, run by Ashman Bank, is designing a mortgage scheme for buy-to-let landlords. This innovative scheme would enable landlords to include the costs of energy improvements in their overall package.
The 26 projects that have been chosen for funding today have six months to carry out their research, development, and testing activities. After that, they can apply for larger Government grants, from £200,000 to up to £2 million each. Today’s funding, totalling £4.1 million, is part of the bigger £20 million Green Home Finance Initiative.
This funding is in addition to the previous £1.8 billion given under the Home Upgrade Grant (HUG), which is aimed at privately owned properties. The Social Housing Decarbonisation Fund is for properties owned by local authorities and other social housing providers.
How expensive is it to retrofit a home?
Retrofitting a property means making it more energy efficient by adding or replacing features that save energy. The cost of retrofitting can vary a lot, depending on many factors such as the size, age, condition, and type of property, and the kind of energy-efficient upgrades planned.
Older homes usually need more retrofitting because they often don’t have modern energy-saving features. This could include adding wall and loft insulation, energy-efficient windows and doors, and replacing the heating system with modern, energy-efficient options like an air source heat pump. The total cost of these improvements can be very high, sometimes tens of thousands of pounds.
For example, according to the Energy Saving Trust, wall insulation can cost from £400 to over £700 for cavity walls, and from £7,400 to £13,000 for solid walls. Energy-efficient double or triple glazed windows can cost several thousand pounds, depending on how many and how big they are. High-efficiency boiler systems can cost more than £2,000, and an air source heat pump can cost more than £10,000 to install.
Retrofitting might also involve renewable energy technologies such as solar panels. The cost of installing solar panels on a home can be from £6,000 to £10,000. Other energy-efficient appliances and features such as LED lighting, high-efficiency appliances, and smart thermostats will also add to the overall cost.
But these costs are only paid at the start. In the long run, the cost of retrofitting can be much lower than the savings made from using less energy. Also, grants and incentives from the government or energy companies can help pay for some of these costs, making retrofitting a more affordable and eco-friendly choice for homeowners
0% interest Green Additional Borrowing mortgage from Nationwide in Full
If you’re looking for a way to fund your energy-efficient home improvements, the Nationwide 0% interest Green Additional Borrowing mortgage could help. Get 0% interest on your borrowing for the first 2 or 5 years.
Using the 0% Green Additional Borrowing mortgage
Features and benefits:
- Choose from a 2 or 5 year fixed rate mortgage.
- Get 0% fixed interest for the first 2 or 5 years.
- Borrow £5,000 to £15,000, depending on your circumstances.
- Borrow up to 90% of the property value (LTV).
- There are no product fees with this mortgage.
Please be aware that:
- 100% of the loan must be used to make energy-efficiency improvements to your home. Such as: a boiler upgrade, solar panels, air source heat pumps, cavity wall insulation, double glazing or replacement windows, EV electric vehicle charger, loft insulation. Some exclusions may apply.
- Your 0% interest rate will stop when your fixed deal period ends. Any outstanding amount will automatically move onto our variable Standard Mortgage Rate (SMR). Or you may able to switch to another rate, subject to availability and eligibility.
- There is a limit of one Green Additional Borrowing mortgage per property.
- This product is limited and can be withdrawn by Nationwide at any time.
To apply for a Green Additional Borrowing mortgage:
- You need to be an existing member with a Nationwide mortgage, which you’ve had for 6 months or longer.
- Your existing mortgage, combined with the additional borrowing, is not more than 90% of the value of your home.
- The mortgage term of the additional borrowing cannot exceed the mortgage term of the existing main mortgage account.
- Spend 100% of your additional borrowing on eligible energy-efficient home improvements.
Representative example
A mortgage of £15,000.00 over a term of 19 years on an initial 5 Year Fixed Rate at 0% (fixed) would require 60 monthly payments of £65.79 and 168 monthly payments of £107.94 based on our Standard Mortgage Rate currently 7.74% (variable). The total amount payable would be £22,070.77 made up of the loan amount plus interest (£7,070.77), product fee (£0.00) and valuation fee (£0.00). The overall cost for comparison is 4% APRC Representative.
This Representative Example is for illustration purposes only. It is not an offer. These figures are representative of the typical costs and repayments for this type of mortgage based on customer type. Your actual costs and monthly repayments will vary depending on your mortgage.
Are you considering installing Solar Panels or an EV Electric Vehicle Charger?
If you are a UK homeowner considering installing solar panels or an EV electric vehicle charger, get in touch! The solar energy experts here at NXTGEN Energy will be more than happy to help you on your Solar journey. We are also able to discuss alternative types of green energy products, just in case a solar PV system isn’t suitable for your home! Call us on 01268 928 690 or simply click enquire now to fill out our short form, to get connected to a Solar Energy Expert
Frequently Asked Questions about the 0% Green Additional Borrowing Mortgage from the Nationwide Building Society
0% interest Green Additional Borrowing mortgage. If you’re looking for a way to fund your energy-efficient home improvements, Nationwide’s 0% interest Green Additional Borrowing mortgage could help. Get 0% interest on your borrowing for the first 2 or 5 years.
You can borrow from £5,000 to £15,000, depending on your current circumstances.
100% of the mortgage must be used to make energy-efficiency improvements to your home. Such as: a boiler upgrade, solar panels, air source heat pumps, cavity wall insulation, double glazing or replacement windows, EV electric vehicle charger, or loft insulation. Some exclusions may apply.
Yes, there are some limits. There is a limit of one Green Additional Borrowing mortgage per property and the 0% Green Additional Borrowing Mortgage is limited and can be withdrawn by Nationwide Building Society at any time.
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