Retail banking

Virgin Money launches lower interest Greener Mortgages for energy efficient new-build homes

  • Virgin Money will fund environmental projects that reduce emissions and offset the equivalent of 12 months of home emissions for every mortgage sold
  • Greener Mortgages available on new-build for first and next time buyers and include Help to Buy Equity Loan options with rates starting at 1.25%
  • Research among Virgin Money customers found the pandemic has made a third (34%) think more about their impact on the environment
  • Each Greener Mortgage will fund sustainability projects around the world and Virgin Money also aims to fund the planting of 100,000 trees

Virgin Money has launched Greener Mortgages, its new mortgage offering lower rates of interest to customers buying energy efficient, new-build homes. Greener Mortgages are designed to reward customers who buy greener, new-build homes which have an Energy Performance Certificate (EPC) or Predicated Energy Assessment (PEA) rating of A or B. The new mortgage range* is available to first and next time buyers and include Help to Buy Equity Loan options. It features a range of two and five year fixed rate mortgages which come with cashback to help towards valuation costs. The products are available at 65%, 75% and 85% LTV for standard residential mortgages and at 55% and 75% LTV for Help to Buy Equity Loan products. A £995 fee applies and the rates - which start at 1.25% - are 0.1% below the equivalent core rates.

In partnership with Carbon Neutral Britain, one of the UK’s leading carbon offsetting initiatives, for each Greener Mortgage sold, Virgin Money will fund sustainable energy projects around the world such as reforestation, hydro and solar to offset five tonnes of carbon emissions, the equivalent of those produced by an average UK home over a 12-month period. Together Virgin Money and Carbon Neutral Britain are also aiming to plant 100,000 trees from the sale of Greener Mortgages.

Studies** have shown that around 15% of the UK’s total carbon emissions come directly from residential homes and, in a survey*** of more than 1,000 of its customers, Virgin Money found that just over two thirds of people (67%) are keen to live a greener life and more than four fifths (86%) understand the steps that need to be taken to address climate change.

The survey also found that tackling climate change is important to 78% of people and the pandemic has made over a third (34%) think more about their environmental impact. Almost three quarters of those surveyed (74%) said they are actively taking steps to reduce the impact they have on the environment.

Hugh Chater, Chief Commercial Officer, Virgin Money, said: “We want to give our customers the chance to make a greener choice in their finances. Our Greener Mortgages reward customers who choose a more energy efficient new build home with a lower interest rate, coupled with funding renewable energy and tree planting, meaning their mortgage is kind to both the environment and their wallet.”

James Poynter, Director, Carbon Neutral Britain, said: “Carbon offsetting is a simple and affordable way for people to reverse their home’s impact on the environment, given residential properties’ significant contribution to the UK’s carbon footprint. Virgin Money Greener Mortgage customers will know that they live in an energy efficient home and that the equivalent amount of carbon output from heating and lighting their home has been offset thanks to their chosen mortgage and our partnership. That’s why we are so proud to partner with Virgin Money on their Greener Mortgages.”

Virgin Money announced its aspiration to halve carbon emissions across everything it finances by 2030 as part of the launch of its ESG strategy in 2020. The launch of Greener Mortgages follows the introduction of new sustainability-linked loans which reduce the cost of finance for those businesses whose core activities proactively help the economy transition to a more sustainable model. Virgin Money is the first bank in Europe to offer such loans in commercial banking.

*New Build Purchase Mortgages Rates

  • 85% LTV 2 and 5 year fixed rates starting from 2.33%
  • 75% LTV 2 and 5 year fixed rates starting from 1.44%
  • 65% LTV 2 and 5 year fixed rates starting from 1.25%

Help to Buy Equity Loan Rates

  • 75% LTV 2 and 5 year fixed rates starting from 2.00%
  • 55% LTV 2 and 5 year fixed rates starting from 2.00%

**2019 UK Greenhouse Gas Emissions, Final Figures Report by Department for Business, Energy and Industrial Strategy. Updated February 2021.

***Virgin Money surveyed 1011 customers between 11th and 18th May 2021 via its online research community.