Nationwide to offer interest-free green loans to more borrowers

Nationwide Building Society is set to double the number of mortgage borrowers who can access its interest-free green loan facility, taking the total potential reach to 10,000 households.

The mutual’s 0% Green Additional Borrowing products, first launched in June 2023, were originally designed to support 5,000 existing mortgage customers with the cost of improving the energy efficiency of their homes. The expanded commitment will allow a further 5,000 households to take out interest-free borrowing for approved retrofit measures.

Under the scheme, eligible Nationwide mortgage customers can apply to borrow between £5,000 and £20,000, subject to a maximum 90% loan-to-value cap. The additional borrowing is available on two-year or five-year terms, and applications can be made once the borrower’s first mortgage payment has been made.

Since launch, Nationwide has advanced around £60 million through the 0% Green Additional Borrowing range, with an average loan size of about £13,000. The most common uses of the loans have been for solar panel installation, insulation upgrades and replacement windows.

Take-up has been strongest in the South West, which accounts for 16% of completed green borrowing cases. The Outer Metropolitan and Outer South East regions each represent 12% of completions.

The move comes against a backdrop of continued scrutiny of the carbon footprint of UK housing. Residential properties remain a significant source of greenhouse gas emissions, with homes in England responsible for around a fifth of the total. Nationwide, citing joint research with WPI Economics, said that raising all residential properties to an EPC rating of band ‘C’ or above could reduce emissions from England’s housing stock by up to 47%.

“Initiatives like this that support retrofitting not only help homeowners reduce their energy bills and carbon emissions, but also play a crucial role in improving the overall sustainability of the UK’s ageing housing stock,” said Mary-Lou Press, president of industry body NAEA Propertymark.

“However, while this pilot is a positive step, broader and more accessible green financing solutions are needed across the market so that more property owners can benefit. To truly unlock retrofit opportunities at scale, governments across the UK, lenders, and the property industry must work together to ensure that support, supply-chain capacity and consumer awareness keep pace with net-zero ambitions.”

Nationwide is also participating in the Green Home Finance Strategic Partnership, set up under the government’s Warm Homes Plan and led by the Green Finance Institute. The partnership brings together lenders, energy sector stakeholders and consumer groups to develop mainstream green home finance solutions and support large-scale retrofitting.

“We are committed to helping our members improve the energy efficiency of their homes,” said Henry Jordan (pictured right), group director of mortgages at Nationwide. “Extending our 0% Green Additional Borrowing products will help another five thousand households who want to retrofit their home and can afford long-term investment but struggle to meet the upfront costs.

“However, more is needed and collaboration is crucial if we are to decarbonise the UK’s housing stock. We are, therefore, delighted to be part of the Green Home Finance Strategic partnership, which will play a leading role in helping to unlock the changes needed to make our homes resilient for the future.”