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Saving the planet is one of the hottest topics around – no pun intended! In fact it is arguably the biggest issue facing humankind and has been brought all the more to the fore with Al Gore’s film, An Inconvenient Truth.
Such is the extent of the spread of the discussion that it even arises in the unlikely area of mortgages with a number of lenders offering so-called green mortgages. Typically these are mortgages where the lender aims to help you offset your carbon emissions, normally by planting trees for a period of time after you have taken out your mortgage, thus potentially helping you to achieve carbon neutral status.
Wanting to do your bit for the environment is not that easy when it comes to mortgages - currently there are only five mortgage providers offering green mortgages: the Co-operative Bank, the Ecology Building Society, Norwich and Peterborough building society, Giraffe Money and the Saffron building society.
As seems to be the case currently for all things “green” they can come at a higher price. For example N&P have recently stated:
“Clients will not be benefiting from the most competitive rate on the market, but this is because offering a green mortgage incurs a greater cost to the lender. Planting trees and ensuring their management in perpetuity is not cheap. N&P has planted forests in East Anglia and Lincolnshire since launching its first carbon-neutral mortgage back in 2000, and these are still being planted today.”*
So is there is another way of being conscious of the environment when choosing your mortgage? If you want to make sure that you get a competitive mortgage deal but still want to think about the impact on the environment, you could look at the lender’s environmental policy. For example, HBOS states that:
“We are committed to having a positive influence on the environment. Our primary concern is to reduce emissions and our use of resources. We are committed to achieving carbon neutrality in the UK by the end of 2007.
HBOS has reduced its UK carbon emissions by almost two thirds (65%) from 163,000 tonnes in 2004 to 57,000 tonnes in 2006. This is primarily due to purchasing 100% renewable energy. We are currently the only UK bank to do this.”**
This may be a simpler and more cost effective way of “going green with your mortgage”. It would give you access to the mortgages of far more lenders and allow you to choose a lender that was playing its part in fighting global warming. If you wanted to do something else personally, you could choose to do so with complete clarity on the cost impact on you.
*source Mortgage Strategy 6 August 2007 ** source HBOS website
