Perenna is leading the development and pilot of a green long-term fixed-rate mortgage product following further government funding.
The startup home loans firm and its partners will use the grant to launch its retrofit mortgage product into the market.
It says its loan will focus on homes that need to be upgraded, rather than homes which are already energy efficient
The mortgage comes with a green rate discount, for lower energy usage, which applies once customers complete a qualifying retrofit that will see their home loan switched to a lower rate with smaller monthly payments.
It says for customers with larger mortgages, it could save them over £60 per month, £720 per year, and £21,600 over 30 years, assuming they do not remortgage.
Almost every existing property in the UK will need some sort of retrofit, equivalent to 29 million homes, according to built environment industry body the UK Green Building Council.
Investment of around £250bn will be needed to fully decarbonise UK homes by 2050, estimates the government-backed Climate Change Committee.
Perenna is working with home energy management system firm Heatio and Energy Systems Catapult, who will conduct consumer research on the project, due to launch as a pilot this summer.
The project falls under the Department for Energy Security & Net Zero’s Green Home Finance Accelerator fund, which awarded £14.3m in grants to 12 UK projects.
Perenna and its partners received £888,465.25, according to an update from the department in January.
Perenna founder and chief executive Arjan Verbeek says: “Perenna wants to change the narrative on renewable energy technologies.
“There are too many obstacles currently to retrofitting a property, with confusing offers and unclear steps on what to do.
“This needs to change if we want to solve one of the biggest challenges for achieving net zero.”
Perenna launched last year and lends up to 95% loan to value on fixed-rate terms ranging from 20 and 40 years at up to six times a borrower’s income.
