Nationwide have announced on Monday that from 1 June, it will be updating its Green Additional Borrowing range to offer 0% products to their existing Nationwide mortgage members for the first time.
Nationwide said that by making the right home improvements could save you money on energy bills and to reduce carbon footprint, but for many, the initial cost can be a hurdle.
This is where Nationwide’s new 0% mortgage products come in as there is no interest to pay for up to five years.
Nationwide will help make energy efficient home improvements and a greener home more affordable and accessible.
The new Green Additional Borrowing products will offer between two and five year fixed term options, with loan sizes from £5,000 to £15,000, up to 90% Loan to Value (LTV).
The entire loan must be spent on green home improvements, such as:
- solar panels
- air source heat pump
- window upgrades
- boiler upgrades
- cavity wall insulation
- loft insulation
- an electric car charging point.
There may be exclusions on the use of funds. Members can use any local or national contractor or supplier for the work.
The 0% rate is available for the initial deal period only (two or five years) and will then revert to our Standard Mortgage Rate (currently 7.74%).
Only one 0% Green Additional Borrowing mortgage will be available per household, subject to your client meeting eligibility.
Craig Fish, director at Lodestone Mortgages & Protection said, “This is a great idea in principle, so well done Nationwide, but more needs to be done.
“There are some significant limitations on this product such as the maximum loan being offered at £15,000. Most ‘green’ improvements that make a difference are going to cost considerably more than this, so I’m not sure that it’s going to be such a popular product.
“Furthermore, whilst offering interest-free loans for a period of 2 or 5 years is great for the green agenda, borrowers need to be aware of the fact that the rate will jump to the lender’s standard rate after the interest-free period ends. As with all these new and innovative schemes, the devil is in the detail, and borrowers should seek independent advice to understand those finer details.”
Gary Bush, financial advisor at MortgageShop.com added, “Nationwide’s new 0% mortgage isn’t quite what it at first leads you to believe but it’s a great start towards a greener UK.
“Nationwide giving all their existing mortgage borrowers the chance to borrow from £5,000 to £15,000 for green-based home improvements without interest charges for up to five years will make a big difference to the UK’s green agenda.
“The fact that the most important improvements on the lender’s list reach far beyond the £15,000 ceiling highlights why more needs to be done in this regard but it’s promising. Well done Nationwide.”
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