Nationwide Building Society has cut the interest rate on its green additional borrowing product to zero per cent.   

The loan, available from 1 June, will allow up to 5,000 households with a Nationwide mortgage to borrow between £5,000 and £15,000 at up to 90% loan to value across two, or five-year terms.  

All of the loan must be used to fund non-structural, energy-efficient home improvements, such as solar panels, air source heat pumps, window upgrades, boiler upgrades, cavity wall insulation, loft insulation or an electric car charging point.   

Borrowers can use any local or national contractor or supplier for the work.  

The lender says it hopes the loans “can effect positive change by incentivising members to make green home improvements”.  

It points out that the UK’s 29 million homes produce around 16% of the country’s emissions. The firm adds that the move is part of the country’s commitment to hit net zero by 2050.  

Nationwide Building Society director of home Henry Jordan says: “Residential properties are one of the biggest causes of emissions and there is a need for more to be done by government and business to encourage households to act.   

“A key barrier to making homes more energy efficient is not only the upfront costs associated with retrofitting, but also the payback period of making such changes.  

“It’s clear to us that only meaningful incentives will help shift behaviour.   

“So, by launching this latest product for up to 5,000 of the society’s mortgage holders, we can test and understand whether offering zero per cent interest will encourage members to make the necessary green home improvements, where the costs of finance may have, until now, discouraged them.”  

The move was broadly welcomed by brokers.  

EHF Mortgages managing director Justin Moy says: “This is an excellent opportunity for Nationwide customers to borrow for any work that will improve the energy performance certificate rating, without any interest costs.   

“It’s arguably the best green mortgage solution from one of the high street lenders to support the improvement in property efficiency.   

“You just need to watch the rate, as it will jump from zero to the lender’s standard variable rate in either two or five year’s time.”  

Nationwide adds that the new green additional borrowing loan is available through its own mortgage advisers as well as brokers.  

The current version of its green additional borrowing product will be withdrawn by midnight on 31 May.