Mortgage borrowers are being offered interest-free loans to improve the energy efficiency of their homes for the first time.
Nationwide,
Britain’s biggest building society, will let up to 5,000 of its
mortgage customers borrow £5,000 to £15,000 to pay for green
improvements without having to pay interest.
The
0pc Green Additional Borrowing home loan, which will be launched on
June 1, must be used for ‘non-structural’ improvements such as solar
panels, air source heat pumps and insulation, as well as upgrades to
windows and boilers.
Electric
car charging stations, small scale wind turbines, investments in
rainwater harvesting, and upgrades of utilities such as lighting will
also be covered by the loans.
The
interest-free period will last for two to five years. After this,
borrowers will pay interest at the mutual's ‘standard mortgage rate’.
The Government wants all homes to have an energy performance certificate (EPC) rating of C by 2035.
Britain’s
29 million homes produce around 16pc of the country’s emissions,
according to Nationwide, but schemes to incentivise homeowners to make
the necessary and often costly upgrades to their homes have thus far
faltered.
To
be eligible for the new loans, homeowners will need to have a mortgage
with a maximum loan value of 90pc of the purchase price of their
property.
Nationwide
and other lenders like Barclays already offer loans for eco-friendly
home improvements, but this is the first time a lender has removed the
interest.
The loan will be subject to affordability checks, with only one 0pc loan available per household.