What Is a Green Mortgage in the UK?
A green mortgage is a product where the interest rate, fees or cashback is linked to the energy efficiency of the property being mortgaged. In the UK this is almost always measured by the EPC rating — a letter from A (most efficient) to G (least efficient) issued after a qualified assessor visits the property.
Most green mortgage products in April 2026 follow one of three structures:
- Rate discount: 0.10–0.25% off the equivalent standard product if the property has EPC A or B.
- Cashback: £250–£1,000 one-off cashback for qualifying properties, often additional to standard cashback offers.
- Fee reduction: Waived or reduced arrangement fee for eligible properties.
Some lenders also offer "green improvement" products that let you borrow more at a standard rate if the funds are used for energy upgrades (new boiler, insulation, solar panels). These are distinct from green remortgages — they finance the improvements rather than reward existing efficiency.
The UK government's net-zero commitments and the FCA's Sustainability Disclosure Requirements (SDR) have pushed lenders to offer green products. Expect the range to grow and the discounts to sharpen over coming years.
April 2026 Green Mortgage Rate Comparison
Snapshot of April 2026 green vs standard 5-year fixed remortgage rates at 75% LTV for a property with EPC A or B:
| Lender | Standard 5-yr Fix | Green 5-yr Fix | Discount | Eligibility |
|---|---|---|---|---|
| Halifax | 4.27% | 4.07% | 0.20% | EPC A or B |
| Nationwide | 4.26% | 4.11% | 0.15% | EPC A or B |
| Barclays | 4.31% | 4.16% | 0.15% | EPC A or B |
| NatWest | 4.28% | 4.13% | 0.15% | EPC A or B |
| Lloyds | 4.30% | 4.18% | 0.12% | EPC A or B |
| Santander | 4.30% | 4.18% | 0.12% | EPC A or B |
| HSBC | 4.27% | 4.27% | £500 cashback | EPC A or B |
| Virgin Money | 4.32% | 4.15% | 0.17% | EPC A or B |
Halifax currently offers the most generous rate discount at 0.20%. HSBC takes a different approach with £500 cashback instead of a rate cut. At 4.07%, Halifax's green product is at the very best end of the UK market, undercutting even standard 60% LTV rates from some lenders.
Worked Example: Green vs Standard on £250,000
Consider Priya and Dev, with a £250,000 mortgage at 75% LTV on a 25-year term. Their modern new-build flat has EPC A. They're comparing Halifax's green 5-year fix at 4.07% with its standard equivalent at 4.27%.
| Deal | Rate | Monthly Payment | Year 1 Interest | 5-Year Total Cost |
|---|---|---|---|---|
| Halifax Green 5-yr Fix | 4.07% | £1,330 | £10,175 | £79,800 |
| Halifax Standard 5-yr Fix | 4.27% | £1,358 | £10,675 | £81,480 |
| Difference | 0.20% | £28/mo | £500/yr | £1,680 |
They save £28 per month, or £1,680 across 5 years. Against a £999 arrangement fee (same on both products), the green discount generates a net £1,680 advantage.
On a £500,000 mortgage the savings double to around £3,360 over 5 years. On a £125,000 mortgage they're £840 — still worthwhile but more modest.
EPC Rating: How It's Calculated and How to Improve It
Your EPC rating is a numerical score (1–100) that translates into a letter band:
- A: 92+ — top tier. Typically new builds to 2022+ standards, or heavily retrofitted older homes.
- B: 81–91 — very efficient. Modern homes with good insulation and efficient heating.
- C: 69–80 — the government target for rental properties from 2028.
- D: 55–68 — typical for older UK homes without retrofits.
- E–G: Poor efficiency. Many Victorian and Edwardian homes fall here without upgrades.
The assessor looks at: heating system, hot water system, insulation (walls, loft, floor), glazing, ventilation, lighting, and renewables (solar PV, heat pumps, etc). A modern gas combi boiler with good insulation typically earns B; add solar PV or a heat pump and you can push to A.
If your property is D or below but you want a green rate, you may need to invest in upgrades first — loft insulation, cavity wall insulation, double glazing, a new boiler, or solar PV. Some lenders like Nationwide and Halifax offer green improvement mortgages to finance the upgrades as part of the remortgage.
