EPC house

Ethical lender Ecology Building Society is incentivising sustainable building with a new range of discounts for the most energy efficient homes on its C-Change mortgages for custom and self build homes.

The new discounts have a maximum discount of 1.5% off the rate for homes that reach Passsivhaus standards, with a sliding scale of discounts available for other highly energy efficient standards. The enhanced range builds on the building society’s record for supporting sustainable and energy efficient projects.

Not only do the new discounts help meet the UK’s net-zero ambitions, but they are a welcome incentive at a time of increasing mortgage rates and the wider cost of living crisis.

How the products work

Ecology’s self-build mortgages start with an initial rate of 4.99% during the construction phase of your project (from 1 August). Once completed, borrowers who have achieved the right standard are eligible for a C-Change discount of up to 1.5% based on the SAP rating in the EPC (Energy Performance Certificate) or if the property is accredited to the AECB Building Standard or Passivhaus standard.

The changes also include the addition of dedicated discounts for homes built to a SAP rating from 100 to 109 and SAP ratings of more than 110, of 1% and 1.25% respectively. This is a first, which Ecology is referring to as A+ and A++, that reflects the environmental performance of homes built to a standard that generates more energy than they consume.

Building Regulations require that a SAP calculation and a predicted ‘On construction’ Energy Performance Certificate (EPC) is submitted for new dwellings prior to building work commencing.

New range of C-Change Sustainable Homes discounts

Ecology Green discounts

For example, if the finished build is accredited to the Passivhaus standard a discount of 1.5% applies giving a variable rate of 3.49% for the remaining term of the mortgage (from 1 August). An application fee of £799 is payable and applicants can borrow up to 80% of the property’s value in stages to support the progress of the build.

The decision to enhance the discounts comes at a time when the government is recognising the urgent need to reduce the carbon impact of house building and has stated that new homes much reduce carbon emissions by 75% by 2025.

The Society also offers a Renovation Mortgage where a property is being purchased for renovation or retrofit. They will consider lending on homes in any condition, as long as the works required improve the energy efficiency of the property. On completion of the renovation the Society’s retrofit discounts apply.

Daniel Capstick, Ecology’s Mortgage manager explains, “Now more than ever it’s important that lenders play an active role in incentivising green building and helping to reduce energy bills. We’ve been leading the way on sustainable mortgages for over 40 years, and we hope that the updates to the C-Change discounts will encourage our borrowers to build even more energy efficient homes, which is critical in the fight against climate change.”

Mark Stevenson, Chair of the National Custom and Self Build Association said:  “NaCSBA knows that custom and self-builders lead the way in innovation and sustainability, as individuals invest more in a home that they have designed to suit their needs than a speculative builder would.

“This was evidenced in our 2022 Custom and Self Build Market Report, where over half of all self-builders said they had used a sustainable heat source in their project. Ecology’s new discounts are a welcome incentive in the market, rewarding those who want to build a more sustainable future for themselves and their communities, and which set a challenge for the wider industry to raise its game and promote more sustainable construction practices.”

Find out more about Ecology’s C-Change mortgages

Image credit: Image by MVOprp from Pixabay

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