Nationwide launches 0% loan for green home improvements

Nationwide launches 0% loan for green home improvements

Nationwide Building Society has taken a step towards promoting green home improvements by offering 0% interest on Green Additional Borrowing products.

Available from 1 June, these new borrowing options aim to incentivise up to 5,000 mortgage members to make energy-efficient modifications to their homes. They will be able to borrow between £5,000 and £15,000 at a maximum 90% Loan-to-Value (LTV) over two or five years.

The eco-friendly initiative is part of the UK’s broader commitment to reduce emissions and reach the net zero target by 2050. Nationwide acknowledges its limited influence on emissions from properties it lends on but believes that removing interest on the green loans can instigate change by encouraging members to go green.

For instance, a member who borrows the maximum £15,000 for five years will see their monthly payments reduce from £275.50 to £250, a saving of £1,530 over the term of the deal, compared to the previous product rate of 3.89%.

Henry Jordan, director of home at Nationwide Building Society, said: “Residential properties are one of the biggest causes of emissions and there is a need for more to be done by government and business to encourage households to act.

“A key barrier to making homes more energy efficient is not only the upfront costs associated with retrofitting, but also the payback period of making such changes.

“It’s clear to us that only meaningful incentives will help shift behaviour. So, by launching this latest product for up to 5,000 of the Society’s mortgage holders, we can test and understand whether offering zero per cent interest will encourage members to make the necessary green home improvements, where the costs of finance may have, until now, discouraged them.

“As a mutual, we’re committed to returning value back to our members, which is demonstrated by this being the first time we’ve taken this approach. Creating a greener society is a shared goal and we need to make it as easy as possible for households to play their part.”

The zero-interest Green Additional Borrowing home loan is accessible through Nationwide’s mortgage advisers and brokers. The funds borrowed must exclusively be used for non-structural, energy-efficient improvements such as solar panels, boiler upgrades, loft insulation, or an electric car charging point. Members can choose any local or national contractor for the work.

The previous Green Additional Borrowing product will be discontinued as of midnight on 31 May 2023.

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