Nationwide Building Society has announced a new type of mortgage product aimed at encouraging people to make their homes more environmentally friendly, by offering cheaper rates for green home improvements.

The society revealed at least 50% of its ‘Green Additional Borrowing product’ – which will be available from today – must be used to fund non-structural, energy-efficient home improvements, such as solar panels, boiler upgrades, traditional insulation or electric vehicle charging stations.

Nationwide, which has more than 1.5 million homes on its mortgage balance sheet, said its decision to offer green home loans forms part of the society’s £1bn pledge to reduce the carbon footprint of homes in the UK.

The loans will be exclusively available to the society’s mortgage members and offer significant rate reductions of up to 0.69% from Nationwide’s existing no fee, two and five-year fixed further advance rates. As a result, the society added that rates will start from 1.0% with no product fee.

Nationwide director of mortgages, Henry Jordan, commented: “It’s becoming ever clearer there is an urgent need to reduce the carbon emissions from our homes. We believe meaningful incentives are the only realistic way to help people make their homes more sustainable, which is why we today launched our new Green Additional Borrowing product.

“This new loan is the first product we are launching as part of our wider commitment to make £1bn available to kickstart green home improvements. In this case, existing Nationwide members can borrow up to £25,000 at highly competitive rates – this is up to 0.69% lower than our standard two and five-year fixed further advance rates.

“With more than 1.5 million homes on our mortgage balance sheet, we believe offering this new loan can make a real difference as we play our part in helping to tackle the climate crisis and help members to do the same.”

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