According to the lender, the new mortgage is available from next week and borrowers are able to choose two or five-year fixed rates up to 90% LTV, with Help to Buy mortgages also available up to 75% LTV.
The mortgage offers 10bps discounts off traditional Barclays products and promises savings of up to £750 on a typical mortgage of £150,000 over the five-year fixed rate term.
The Barclays Green Home Mortgage will be available to anyone that purchases an A or B EPC Energy Efficiency Rated new build home from an initial group of five Barclays partner house builders, with plans to partner with all major UK house builders by the end of year.
The initial five partners include Barratt Homes, Berkeley Group, Countryside Properties, Crest Nicholson, and Redrow Homes.
Over 80% of new build properties completed in 2017 already achieved an A or B EPC Energy Efficiency Rating.
Barclays estimates that reduced energy bills will also result in potential savings of up to £585 a year on a typical three bed property, leading to total savings of up to £1,550.
The mortgage responds directly to the Government’s Green Finance Taskforce recommendation to support Clean Growth in the mortgage market.
Hannah Bernard, head of Barclays Mortgages, said: “We are increasingly hearing from our mortgage customers that they’re interested in purchasing an energy efficient home. Given Barclays' commitment to supporting our customers’ transition to a low-carbon and sustainable lifestyle, we have compelling reasons to launch this pioneering product. We’re looking forward to expanding our offer to more customers and through more house-builders later this year.
We’re proud to be the first major UK mortgage lender to offer a product that helps home buyers in their decision to purchase a green new-build home. On top of this, we are committed to expanding the Barclays Green Home Mortgage suite so that it is available to a wide range of customers and property types by 2019.”
Claire Perry, Energy and Clean Growth minister, commented: “As part of our Clean Growth Strategy, the Government is committed to supporting the development of green mortgage products, and enhancing our reputation as a world-leading green finance sector.
As well as the prospect of an exciting new energy efficient home for consumers, the launch of Barclays Green Home Mortgage, a major UK financial institution, is exactly the kind of progress I want to see more of as we consider the recommendations of the Government commissioned Green Finance Taskforce.”
Tom Delay CBE, Carbon Trust chief executive, added: “It is great to see new approaches being pioneered to reward homeowners for choosing to live in highly energy efficient homes. As well as a lower mortgage rate from Barclays, there are huge benefits to be gained from improved energy efficiency, both for individual households and on a national level.
Efficient properties are often nicer places to live – warmer in winter, cooler in summer, and cheaper to run. Looking at the bigger picture, reducing overall energy demand is also an important part of the UK’s action on climate change, making it easier to keep the lights on, taking the strain off national gas supplies, and ultimately reducing the cost of the transition to a low carbon economy.”
Rhian-Mari Thomas, chair of Barclays Green Banking Council and member of the Government’s Green Finance Taskforce, concluded: “Barclays Green Home Mortgage is a truly innovative product, conceived and realised thanks to the collective efforts and shared vision of Barclays Green Banking Council. Working collaboratively across Barclays, our Council is pioneering the creation and delivery of successful market-leading green products, services and partnerships, as we strive to ensure the full spectrum of valued customers and clients can benefit from our Green finance solutions. I’m incredibly proud to be a part of this.”
