Santander has launched a mortgage that could allow buyers of eligible Octopus Zero Bills homes to borrow up to £30,000 more.
The lender said it was the first UK high street bank to offer a mortgage designed specifically for homes covered by the Octopus Energy tariff.
The mortgage is available on selected new-build properties that qualify for a guaranteed 10 years without home energy bills.
Octopus launched Zero Bills in 2022. Eligible homes are fitted with a heat pump, battery and solar panels, with customers guaranteed no home energy bills for at least five to 10 years.
Santander will take the resulting reduction in monthly household expenditure into account when assessing mortgage affordability. The companies said eligible applicants could therefore borrow up to £30,000 more than they could for a comparable property with typical energy costs, subject to Santander’s lending criteria.
The launch follows the introduction of the Future Homes Standard, which requires new homes to incorporate technologies including heat pumps and solar panels.
Octopus said its heat pump sales had risen by 103%, while solar panel sales were up by 78% and enquiries about electric vehicle chargers had increased by 42%.
Separate research published by Santander found that 52% of UK adults believed improving their home’s energy efficiency would have a significant effect on their lives. Reducing energy bills was the principal motivation for home improvements among 80% of respondents.
Nigel Banks, Zero Bills director at Octopus Energy, said: “Not all homes cost the same to live in, so they shouldn’t all be treated the same when it comes to mortgages. Zero Bills homes come with guaranteed no home energy bills, giving homeowners lower monthly outgoings from day one.
“This mortgage with Santander recognises that lower cost of living, helping more buyers access cleaner, smarter homes and brings the benefits of Zero Bills living to even more people.”
Ben Merritt, head of mortgages at Santander UK, said: “As the first major bank to recognise the benefits of Octopus Energy’s Zero Bills homes within our affordability assessment, we’re helping customers make the most of lower household outgoings when buying an eligible newbuild home.
“By taking into account the 10-year Zero Bills guarantee from Octopus, this provides greater flexibility in the amount some customers are able to borrow, helping more people access homes that are designed to be energy efficient and more affordable to run.
“This partnership is another example of how we’re evolving our mortgage offering to reflect the changing needs of homeowners and support customers who are buying energy efficient homes.”
Ryan Jude, programme director at the Green Finance Institute, said: “The £242 billion flowing through the UK mortgage market each year is one of the most powerful levers we have to help households upgrade to warmer, more efficient homes.
“Santander’s enhanced affordability offer opens the door for more people to invest and upgrade with confidence, building momentum behind a more innovative mortgage market.
“The GFI has long supported the role of enhanced affordability in the green mortgage market to support homeowners with low or no energy bills to be able to borrow more, and we are delighted to see Santander put this concept into practice.”
Octopus has approved more than 6,000 Zero Bills homes through partnerships with developers including Vistry, Thakeham, Wates and gs8. The properties include affordable and private rented homes, as well as private and shared ownership housing.
The energy supplier aims to deliver 100,000 Zero Bills homes by 2030. It has also introduced the initiative in Germany, France and New Zealand.
