Atom bank has unveiled a new commercial mortgage discount aimed at incentivising property owners to improve the energy efficiency of their buildings.
The digital lender’s ‘Better Buildings’ discount will apply to commercial mortgages secured against properties with stronger environmental credentials, as part of its wider pledge to become climate positive.
The initiative will offer borrowers a discount of 0.25% on their commercial mortgage if their property achieves either an EPC rating of A+/A or a BREEAM rating of ‘outstanding’ or ‘excellent’. Properties rated EPC B or BREEAM ‘Very Good’ will qualify for a 0.10% discount.
The offer is limited to one discount per application, and in the case of multi-property portfolios, over 70% of the portfolio’s value must meet the relevant threshold for the discount to apply.
To support the rollout, Atom has added new functionality to its application form and Quick Quote tool, allowing brokers to input EPC or BREEAM ratings directly. The energy efficiency data must be evidenced at the time of application and will be confirmed during the valuation process. Should the declared rating prove to be inaccurate, the discount will be withdrawn.
The launch follows a recent 0.25% rate cut across Atom’s commercial fixed rate mortgage range, with an additional 0.25% discount already available for loans between £1m and £4m.
Tom Renwick, head of business lending at Atom bank, said the discount was part of a broader strategy to support decarbonisation in the commercial property sector.
“We’re incredibly passionate about supporting improvements to the efficiency standards of commercial property across the UK,” he said.
“With the introduction of our Better Buildings discount, Atom bank is not just helping to drive positive change; we’re actively rewarding it. We’ve ensured that the best rated properties will benefit from our most competitive rates, regardless of whether they have an EPC or BREEAM rating.”
He added that the bank would continue to strengthen the criteria for qualifying properties, in line with its ambition to support the decarbonisation of the built environment, which is estimated to account for around 25% of the UK’s total greenhouse gas emissions.
The Better Buildings scheme forms part of Atom’s long-term commitment to becoming a climate positive bank by 2035. The pledge covers not only its direct operations, but also all emissions associated with its lending activities – a level of ambition it claims is unmatched in the UK banking sector.
In support of this goal, Atom has invested in natural capital initiatives, including the purchase of 25 acres of land in Northumberland which is now being developed into broadleaved woodland. The bank estimates the woodland will sequester 7,000 tonnes of carbon over its lifetime, equivalent to its entire operational output since its launch over a decade ago.
The lender is also financing projects that generate Biodiversity Net Gain units, required by housebuilders to offset environmental impact under new planning regulations. These efforts, alongside the Better Buildings discount, reflect a growing emphasis on environmental performance in commercial lending.
Renwick urged brokers to take advantage of the new tools now available to identify eligible clients and demonstrate the financial benefits of improved energy efficiency. “Brokers can head to our Quick Quote tool now to get an immediate idea of the discounts available to their commercial clients and see the real impact improved efficiency ratings will have on the cost of their borrowing,” he said.
