# Green mortgages explained: cheaper rates for energy-efficient homes

> Mortgages & first homes · Last updated 23 June 2026

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## Quick answer

Green mortgages offer lower interest rates or cashback to buyers of energy-efficient homes — typically those with an EPC rating of A or B. Some lenders also offer retrofit mortgages to fund energy improvements.

## Who should skip this

Skip this page if you need a personal recommendation or a live quote. This is general UK information — confirm today's figures with the official source linked below.

Green mortgages are a growing segment of the UK mortgage market. Lenders offer preferential rates because energy-efficient homes have lower running costs, making borrowers less likely to default. They also align with government targets to improve the UK's housing stock energy performance.

## Key facts

- Most green mortgage discounts require an EPC rating of A or B at the time of purchase
- Rate discounts are typically 0.1–0.3 percentage points below standard products
- Some lenders offer additional borrowing to fund energy improvements such as insulation or solar panels
- Green mortgages are available for purchases, remortgages, and buy-to-let properties

## How green mortgages work

You apply for a mortgage product labelled 'green' by the lender. The lender checks the property's Energy Performance Certificate (EPC) — most require rating A or B, though some accept C for retrofit products.

If eligible, you receive a lower interest rate, cashback on completion, or access to additional borrowing for energy upgrades at preferential rates.

## Retrofit and improvement mortgages

Some lenders offer 'green further advance' or retrofit mortgages that let you borrow extra to install insulation, heat pumps, solar panels, or double glazing.

The improvement must typically raise the EPC rating. Your lender may require a new EPC after the work is completed to confirm the upgrade.

## Is a green mortgage worth it?

A 0.2 percentage point discount on a £200,000 mortgage saves roughly £20–£25 per month. Over a 25-year term, that adds up — but only if the green product's base rate is competitive against non-green alternatives.

Always compare the green product's overall cost against the lender's standard range and other market offers. The green label does not automatically mean cheapest.

## Frequently asked questions

### What EPC rating do I need for a green mortgage?

Most lenders require A or B. A small number accept C for properties where you commit to improvements. Check the specific lender's criteria.

### Can I get a green mortgage on an older property?

Yes, if the property has been upgraded to A or B, or if you use a retrofit mortgage to fund improvements that raise the rating.

### Do green mortgages cost more in fees?

Not usually. Arrangement fees and other costs are similar to standard products. The main benefit is the rate discount or cashback.

## Primary source

https://www.gov.uk/buying-a-home/preparing-to-buy

## Related

- [Mortgage rates explained](https://moneyguide.org.uk/mortgages/mortgage-rates-explained/)
- [Home insulation grants](https://moneyguide.org.uk/bills-utilities/home-insulation-grants/)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.