E.ON and BNP Paribas to develop ‘green mortgages’
The pair aim to provide homeowners with finance through their mortgage to improve the energy efficiency of their home.
Under the scheme, movers, first-time buyers, and remortgagors will be able to use their mortgage to borrow further via a linked ‘energy efficiency home improvement loan’.
BNP Paribas Personal Finance would provide the improvement loan financing and E.ON would provide a managed service to install appropriate energy efficiency solutions.
The improvements through the loan could also result in a discounted mortgage rate once the energy efficiency measures have been verified via an updated EPC, the two firms said.
It comes after Bank of England staff recently found more energy efficient homes were a lower credit risk.
Around 19 million households in Britain fall below an Energy Performance Certificate (EPC) band C rating and could save up to £380 a year by putting basic measures in place, according to E.ON and BNP Paribas.
Michael Lewis, chief executive of E.ON UK, said: “Green mortgages have the potential to be a game changer in the delivery of affordable finance and we are ready to meet the challenge for homeowners motivated to take the step into energy efficient living.
“Our agreement with BNP Paribas Personal Finance is a further step along this journey and brings together two well-known international companies with expertise in financing and delivering energy saving solutions across Europe.”
Claire Perry, minister for energy and clean growth, added: “The UK has led the world in cutting emissions whilst growing our economy – with clean growth driving incredible innovation and creating hundreds of thousands of high quality jobs.
“Ten years on from the Climate Change Act, the first ever Green GB week is a time to build on our successes and explain the huge opportunities for business and young people of a cleaner economy.
“I’m delighted to see how many more businesses and organisations such as E.ON and BNP Paribas Personal Finance are seizing this multi-billion pound opportunity to energise their communities to tackle the very serious threat of climate change.”