The Ecology Building Society has revamped its green mortgages for renovations and whole house retrofit, as its contribution towards the UK’s climate change targets.

The West Yorkshire-based lender has introduced a new variable rate renovation product, which starts at an initial rate of 3.65 per cent while building work is underway.

But once the renovation is complete, borrowers are eligible for a discount of 0.25 per cent for every energy rating step improvement, based on the Energy Performance Certificate of the property, up to a maximum discount of 1.50 per cent.

Homeowners can borrow up to 90 per cent of the property’s value on a repayment basis, or 75 per cent interest-only, or part repayment and part interest only. The lender charges a £600 fee.

It adds, for properties renovated to the more “exacting” Passivhaus EnerPHit standard, an additional discount of 1.25 per cent applies on completion, resulting in a variable rate of 2.40 per cent for the rest of the mortgage.

The UK’s climate change targets are to cut emissions by at least 68 per cent by 2030, compared to 1990 levels, and hit net zero emissions by 2050.

To do this, the society says, the country faces “the colossal challenge of retrofitting the UK’s 27 million homes”.

The lender, founded in 1981, says it specialises in providing mortgages for renovation projects “and in many instances will welcome projects that standard lenders may not accept including where the property is deemed not to be habitable or fallen into disrepair”.

Ecology Building Society mortgage manager Daniel Capstick says: “Now more than ever it’s important that lenders play an active role in a sustainable recovery, helping to build back better.”

Capstick adds: “We’ve been leading the way on green mortgages for nearly 40 years and we hope that our new renovation mortgage will incentivise more people to consider retrofitting their home, which will be critical in the fight against climate change.”