It seems that everywhere you turn in finance, everything is ethical, and so it's no surprise that mortgages would get the green treatment!
Although only a few mortgage lenders do them at the moment, green mortgages, (also known as ethical or sustainable mortgages) are better for the environment (and that is definitely a good thing!)
The environment is currently high on political agendas and in public focus but how much good can a green mortgages really do? (a good question to ask!)
A green mortgage aims to reduce the negative impact on our environment. The lenders that offer green mortgages often make contributions to environmental or welfare charities.
Others will only finance houses that are seen to be environmentally sound.
In addition to this most green mortgage lenders refuse to work with businesses that are known to pollute or damage the environment in any way (good for them we say!)
At the moment there are only 3 lenders that offer the 'green mortgage' package:
One thing they all have in common is that they
all support reforestation schemes, so when you take out mortgages with them, you know that you are helping the environment! (
and keeping lots of woodland creatures happy!)
- So what is a green mortgage?
A green mortgage is a mortgage that is beneficial to the environment in different ways, and to different extents.
Some lenders provide green mortgages by planting a certain number of trees per loan, thereby offsetting its carbon footprint.
Other green mortgages will only be lent on those houses that have an ethical/sustainable direction. Also some green lenders will donate towards the environment on your behalf.
- So how does a green mortgage benefit the environment?
The ways in which they benefit the environment depends on the nature of the lender and the mortgage itself.Some lenders will lend on ethical properties; for instance those built with sustainable materials, those that are energy efficient, or those that offer an ecological payback.
Other green lenders make their mortgages green by donating to a charity or project for you or planting trees on your behalf.
- Are there many green mortgage lenders and how do their mortgages differ?
As we have said only the 3 mortgage lenders named above offer green mortgages.
The Co-op make a direct donation to Climate Care (a charity investing in offsetting carbon emissions), although this has been cynically reviewed by some experts who claim it is too expensive.
The Norwich & Peterborough Building Society, aims to offset the carbon emissions of its borrowers through planting trees, in close association with the Carbon Neutral Company.
So, whether you think they are just another green gimmick or actually a good idea, it seems that green mortgages are set to grow in popularity.
So when you come to choose your mortgage, maybe you shouldn't just consider how much it costs you, but also just how much it costs the earth?