Nationwide has become the first major lender to launch an alternative to the government’s Green Deal loan, after unveiling its new Green Additional Borrowing service.
The world’s largest building society announced that the product will be exclusively available to customers wanting to improve the energy efficiency of their existing home and reduce their energy bills, as well as their impact on the environment.
Under the terms of the deal, current Nationwide mortgage customers hoping to carry out non-structural improvements on their home will benefit from a 0.50% rate reduction on the company’s existing range of two-year fixed and tracker further advance rates.
Providing the energy efficient home improvements meet the building society’s relevant criteria from a list of acceptable measures, it will mean customers can benefit from a rate of 2.29%, including the discount.
The home improvements eligible for funding under the Nationwide schemes include loft, floor and cavity wall insulation, draught proofing and double glazing.
It also covers renewable measures such as solar photovoltaic panels, small-scale wind turbines and solar water heating systems, in addition to new heating controls and rated boiler installations.
Consumers can borrow between £5,000 and £20,000 up to a maximum loan-to-value rate of 85%, with no product fee, though a £99 booking fee will be payable on all reservations.
According to Tracie Pearce, head of group mortgages at Nationwide, Green Additional Borrowing customers will have an “open market choice of suppliers”, giving them the option of selecting either a national brand or a local firm.
“Energy bills continue to rise and many customers are looking to make energy efficient home improvements to try to reduce their bills in the longer term,” she explained.
Ms Pearce noted that Nationwide is marketing the product as “complementary” to the Green Deal.
“Green Additional Borrowing offers an alternative way of funding larger home improvements and can be used if the customer’s preferred approach does not meet all the Green Deal requirements,” she added.
Though Nationwide is arguably the biggest name to offer a Green Deal alternative, it is not the first, with companies such as the Ecology Building Society offering the C-change Retrofit Mortgage.
This offers customers a discount of 1% on the company’s standard variable rate for funds used to install specified energy saving or renewable energy systems