What is a green mortgage?
A green mortgage, also called an energy-efficient mortgage, finances the purchase, construction, or renovation of a residential or commercial property that meets stated energy-performance criteria. The Energy Efficient Mortgage Label Convention covers both efficient buildings and qualifying improvements.
Why does a green mortgage matter to you?
For the EEM Label, provide a recent energy performance certificate (EPC) and a valuation detailing existing efficiency measures. Check the lender's threshold before work. Otherwise, the mortgage may lose its green classification.
How does a green mortgage work?
The lender defines the eligible property and documents the test. Under the EEM Label Convention, the building must meet or exceed relevant market best-practice standards, or the renovation must improve energy performance by at least 30%. Use a recent EPC rating or score plus a property valuation as evidence.
What mistakes should you avoid?
- Assuming every lender uses the same rating or improvement threshold.
- Using predicted savings without a documented baseline and post-work assessment method.
- Calling the borrower's whole business green because one property qualifies.
Is a green mortgage the same as a green loan?
No. A green mortgage is secured on residential or commercial property and tests that building's energy performance. A green loan can finance a wider set of eligible environmental projects and may not be secured on property.
Does every green mortgage require a 30% improvement?
No. The 30% test belongs to the EEM Label Convention's improvement option. A lender or jurisdiction may instead use an energy class, another improvement threshold, or its own classification rule.
What do you send when a lender asks for proof?
Send the current EPC or equivalent rating, valuation, lender eligibility criteria, energy assessment, and renovation specification. For completed work, add invoices, completion records, and the post-work assessment required by the mortgage terms.