Green mortgages and EPCs: the discount that pays for your loft insulation

A handful of lenders now offer a 'green mortgage', a rate discount of around 0.15% to 0.25% if the property holds an EPC rating of C or above. It sounds small, but on a £300,000 mortgage over five years it is £1,000 to £2,200, often more than the cost of the insulation that earns you the rating.

Here is how the discount works, what actually counts as EPC C, and whether it is worth upgrading before you apply.

What counts as EPC C

EPC C is a score of 69 to 80 on the standard assessment. Most post-1990 homes with cavity walls, double glazing and a modern boiler score C. The most common route from D to C is loft insulation (cheap), hot water cylinder jacket (very cheap), and a boiler upgrade if the existing one is old and inefficient.

Be careful, some lenders ask for the EPC to be valid and current, and the rating can change between certificates if the assessor's assumptions differ. We have seen properties drop a band on a reassessment for no real reason.

The discount in numbers

On a £300,000 mortgage over 25 years, a 0.2% rate discount is roughly £48 a month, or £2,900 over a five-year fix. Loft insulation and a cylinder jacket might cost £300 to £600. The maths works even before you account for the energy saving.

When it is not worth it

If the only route to C is solid wall insulation or a heat pump, the cost can be £8,000 to £15,000. The rate discount does not cover that in a five-year fix. In that case, borrow at the standard rate and treat the upgrade as a longer-term decision.

New-build properties

New builds generally score B or A, so the green discount often applies automatically. But some lenders exclude new-build from their green product because the baseline is already efficient. Check the product criteria before you assume.

What we do

We check the current EPC, model whether the upgrade to C pays for itself in rate saving, and match you to a lender whose green product actually applies to your property. If the discount does not stack up, we tell you to take the cheaper non-green deal instead.