Green Mortgages – ethical living

Green loans

If you want to buy off-grid real estate, whether it is a piece of land or a building plot, there are a number of major banks and building societies in the US and the UK which offer ethical or ecological mortgages. They will lend on assets that others banks might not be willing to accept.

Triodos Bank in Bristol, UK, is one of the best ethical lenders, but they do not offer domestic mortgages. However, if what you want is a smallholding and attached cabin, they might be just right.

In North Carolina, the State Employees’ Credit Union (SECU) has approved a Green Mortgage Program. The new mortgage encourages home energy conservation with expanded debt to income ratios, a 50% reduction in origination fees, and 100% financing for qualifying members.

Admittedly green mortgages are a bit of a contradiction in terms ‘ how can you buy into the system and at the same time do your bit for the planet? Really you can’t. But lets be realistic. You have to live, and you have to live somewhere. So if you must take out a loan then don’t beat yourself up about it.

The SECU green mortgages will be available on homes that have received an “Energy STAR” rating, which indicates the home’s level of energy efficiency is at least 15% better than the minimum requirements as set forth in the 2004 International Energy Conservation Code.

The U.S. Department of Energy and EPA helped develop the home energy rating system (HERS) that measures the energy efficiency of homes. The energy efficiency of a home is validated by independent third party inspectors, called raters, who are specifically trained on the HERS guidelines.

Back in the UK, The Co-operative Bank offers customers the knowledge that the companies it deals with are committed to preserving the environment and have a sense of social responsibility. For as long as you have your mortgage the bank will make a payment every year to Climate Care, an organisation dedicated to helping solve global warming.

For house purchases the bank will also provide you with a free Home Energy Report along with your valuation. This tells you how energy-efficient your new home is and suggests ways in which you can improve it.

Norwich & Peterborough Building Society also offers green and brown mortgages for existing and regeneration sites. The green mortgages are available for new homes with an SAP (Standard Assessment Procedure) rating of 80 or more or for a property that you want to make more energy-efficient.

The mortgages are available to first-time buyers, those moving house or remortgagees and help the environment in a number of ways. For each of the first five years of every green mortgage eight trees are planted; the estimated absorption rate of carbon dioxide by the new trees offsets the estimated of that gas from the home.