Quantum Mortgages, the new specialist buy-to-let lender which is scheduled to launch at the end of March, has published details of its green mortgage product.
The lender will initially focus on professional landlords for whom the ‘green LTV boost mortgage’ will help to upgrade existing properties to exceed the 2025 EPC rating requirements.
As well as offering a reduced completion fee and payrate for energy efficient single unit homes, with an EPC rating of A or B, the lender will exceed its usual Loan to Value parameters by an extra 2%, bringing the maximum loan to value to up 82%. In addition, where the property does not have an EPC rating of A or B but landlords commit to improving the property to achieve this rating, the additional 2% can be borrowed to bring the property up to this efficiency level.
A recent report suggested the cost of upgrading properties to be energy efficient could be as high as £6,155, with costs for double glazing, loft and wall insulation or a new boiler often needed to achieve higher EPC ratings. Quantum Mortgages estimate their average property value will exceed £300,000 meaning the additional 2% of borrowing would provide the funding required to cover the cost of improving most properties to become energy efficient.
Quantum Mortgages will initially launch via a limited distribution of Legal & General Mortgage Club members.
Jason Neale, managing director at Quantum Mortgages, said: “The current range of green mortgages available from other lenders simply offer slightly reduced payrates for properties that are already energy efficient but offer no practical help to landlords wanting to improve the energy efficiency of their lower EPC rated properties.
“Cost is obviously a considerable barrier to making homes more energy efficient, so we were keen to help landlords not only meet future EPC requirements but to better them. By exceeding our standard loan to value limits in return for the landlord committing to upgrade the property to an energy efficient home, Quantum Mortgages can help fund the cost of works, removing the considerable capital barrier which can prevent landlords from upgrading homes.”
