E.ON and BNP Paribas develop “green mortgages” for energy efficient homes
Energy provider E.ON teams up with banking giant BNP Paribas to pilot mortgages that could save energy-efficient home owners as much as £380 a year.
The aim is to offer home owners finance via the mortgage on their property. This innovative approach to financing property purchases will mean people who are moving, buying for the first time or remortgaging their homes will be able borrow more through an “energy efficiency home improvement loan” linked to their mortgage.
It is one of the many arrangements that are on offer for home buyers. To navigate the maze, finder UK has a guide to help you better understand how mortgages work and how you should compare the different deals that are on offer.
Under the E.ON and BNP Paribas green scheme, the improvement loan financing would come from BNP Paribas Personal Finance while the managed services that would install the appropriate energy efficiency solutions would be provided by E.ON.
According to the innovative arrangement, any improvements paid for by the loan could lead to a discounted mortgage rate when the property’s Energy Performance Certificate (EPC) is updated and the energy efficiency measures have been verified.
The new move comes after Bank of England researchers discovered that people who live in more energy efficient homes pose a lower credit risk. Their data indicates that about 1.14% of people living in homes that are energy inefficient are in mortgage payment arrears, whereas only 0.93% of people in energy-efficient properties were behind on their payments. The research concludes that a home’s energy efficiency is “a relevant predictor of mortgage risk”.
According to E.ON and BNP Paribas about 19 million households in Britain fall below the EPC B and C rating and by putting basic measures in place these people could save up to £380 a year.
E.ON UK CEO Michael Lewis says green mortgages could be a “game changer in the delivery of affordable finance”. He is keen for more home-owners to step into “energy efficient living”.
Claire Perry, the Minister at the Department for Business, Energy and Industrial Strategy who handles the government’s clean-growth brief, says she is delighted to see businesses like E.ON and BNP Paribas Personal Finance seizing the multi-billion pound opportunity that exists to energise communities into tackling “the very serious threat of climate change”.
The finder UK mortgage pages can help you in a number of ways. They can put you in touch with a mortgage adviser, give you access to an online mortgage comparison and allow you to browse the various mortgage rates that are available.