Lower Mortgage Rates for Eco-Friendly Properties Offered by Half of Mortgage Lenders in 2025

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Half of Mortgage Lenders are Reportedly Offering Lower Mortgage Rates for Eco-Properties

As sustainability and environmental responsibility continue to be a big focus throughout different industries, the mortgage industry is adapting by offering incentives for those who purchase eco-friendly properties.

In 2025, mortgage rates for properties with eco-friendly qualities are notably lower, making sustainable living not only environmentally beneficial but also financially attractive.

In our blog post, we take a look at what it takes for a property to qualify as an eco-friendly ‘green’ mortgage, and discuss the benefits of purchasing an eco-property in 2025.

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Businessmen holding a model of an eco-friendly house with green roof

What Are Green Mortgages and How Does a Property Qualify?

Green mortgages are designed to encourage buyers to purchase properties with energy-efficient features and lower EPC ratings.

These mortgages often come with lower interest rates or cashback incentives, making them more appealing than traditional mortgages for both homeowners and property investors looking to cut costs.

In order to qualify for a green mortgage and benefit from reduced mortgage rates, properties need to hit certain criteria:

Properties must have an EPC rating of A or B. All rental properties in the UK are required to have a minimum EPC rating of C by 2030.
Some mortgage lenders only offer these rates for those buying new-build properties, such as those in a development of off-plan or newly built apartments.
In order to achieve a high EPC rating, properties will usually need to be fitted with eco-friendly features such as strong insulation, heating from renewable sources, solar panels, and rainwater recycling systems. A lot of properties that have been built to be more environmentally friendly include building materials such as recycled or reclaimed wood and recycled steel.

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Should You Consider Investing in Eco-Friendly Property?

Aside from the obvious environmental benefits, mortgage providers recognise that eco-friendly properties have several advantages, such as higher resale values due to high demand, and lower utility costs which make it more likely for a buyer to meet their mortgage payments.

But what about the benefits for those who purchase an eco-property for buy-to-let investment purposes?

Property investors that purchase properties with sustainable features benefit from not only reduced mortgage rates and higher EPC ratings, but also higher demand.

The demand for eco-friendly properties in the UK rental market is increasing significantly, driven by tenant preferences for sustainable living and government regulations. Here are some key statistics highlighting this trend:

In a survey from Handelsbanken in June 2024, it was revealed that over 90% of property investors received tenant requests for eco-friendly features in the 12 months prior.

Tenants are also prepared to pay more to live in properties that hit this eco-friendly criteria, with properties boasting an A or B EPC rating offering up to 7% higher rental costs.

Want to Find an Eco-Property?

In 2025, investing in eco-friendly properties not only contributes to a more sustainable future but also offers financial benefits to property investors and homeowners.

As the demand for green homes continues to grow, buyers can leverage these advantages to create a more environmentally conscious and economically viable housing market in the UK.

If you’re interested in learning more about buy-to-let properties currently available that offer eco-friendly features, explore our UK properties today. We offer units in off-plan developments in key UK areas that are designed with the highest sustainability in mind. Click the link below to explore our UK investment properties and kickstart your eco-property investment in 2025.

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Author

Amy Jackson

Amy Jackson is a property writer at RWinvest, helping our readers stay ahead of UK market trends with the latest news and statistics.

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