Sustainable lender Ecology Building Society has raised the SAP rating entry criteria for its green mortgages for self- and custom-builders.
In a move designed to promote the construction of energy efficient homes the lender has upped the minimum energy rating level (or Standard Assessment Procedure (SAP) rating) to 88 from 85 for self-build applicants to achieve when their build is completed.
By increasing the entry level, Ecology continues to lead the way in supporting construction of the most energy efficient buildings. This contributes to the UK’s net-zero ambitions, which are a key component of meeting our Paris commitments to tackle the climate crisis. To address this, Government has stated that new homes must reduce carbon emissions by 75% by 2025.
A SAP calculation and a predicted ‘on construction’ Energy Performance Certificate (EPC) is required by Building Regulations for all new dwellings before building work commences.
Despite the operating conditions dictated by the pandemic, Ecology started the year with its strongest ever pipeline of lending for low impact homes, and it works with potential borrowers to help educate them around sources for improving build standards.
To incentivise and encourage borrowers to build more energy efficiently Ecology’s self-build mortgage offers a post-completion discount of up to 1.25%, based on the EPC Energy Performance Certificate. This Sustainable Homes version of Ecology’s range of C-Change discounts also incentivises borrowers to build their home to a better energy efficiency. This helps secure long-term savings in energy and borrowing costs.
For homes built to the exacting Passivhaus standard, an enhanced discount of 1.25 per cent is applicable on completion of the works with a resulting variable rate of 2.90 per cent for the remaining term of the mortgage.
Example: if the finished build is A rated EPC a discount of 0.75% applies giving a variable rate of 3.40% for the remaining term of the mortgage. An application fee of £799 is payable. Applicants can borrow up to 80% of the property’s value on a repayment basis (655% interest-only or part repayment and part interest only).
The Society also provides mortgages for renovation projects and frequently will lend against projects that standard lenders may not accept including where the property is deemed not to be habitable or fallen into disrepair.
Ecology’s mortgages are funded by its members who save with Ecology in the confidence their money is being used to have a positive environmental impact.
Daniel Capstick, Ecology’s Mortgage Manager explains,
“Now more than ever it’s important that lenders play an active role in a sustainable recovery, helping to build back better. We’ve been leading the way on green mortgages for 40 years and we hope that the changes to our lending criteria will result in our borrowers building more energy efficient homes, which is critical in the fight against climate change.”