Ecology Building Society is launching a mortgage range for modular construction homes, which are greener properties that are largely built off-site.  

The mutual says it is working with four builders — Agile Homes, HebHomes, nHouse and R. House – but adds it expects to sign up more suppliers “in the coming months”.  

The lender offers two product options, an arrears-based payment mortgage and an advanced payment loan.  

• An arrears payment carries an interest rate of 5.54% – Ecology’s current self-build rate is 5.79%  
• An advance payment carries an interest rate of 6.04%  

The maximum mortgage term of these loans is 30 years.  

The firm adds that an advance stage payment mortgage will provide early payments of up to 80% of build contract costs in the construction stages of kit deposit, manufacturing, delivery and construction to the site.  

An application fee of £995, with an additional standard valuation fee applies.  

On completion of the project, borrowers are eligible for the lender’s C-Change discount of up to 1.5% based on the standard assessment procedure rating in the energy performance certificate, or if the property is accredited to the exemplary Association for Environment Conscious Building, or Passivhaus standards.   

The lender adds that these mortgages can be paired with its cashback option available for eligible residential mortgage applications for projects that include the installation of a heat pump. Qualifying applicants can claim:   

• £500 cashback when borrowers install an air source heat pump  
• £1,000 cashback when borrowers install a ground source heat pump  

Supporting the role of offsite manufacturing and modern methods of construction to deliver greener homes is a key recommendation in MP Richard Bacon’s independent August 2021 review of custom and self-build housing.  

The lender adds that off-site construction provides the opportunity to “quickly build high-quality and more energy-efficient homes with a lower carbon footprint and less construction waste”.  

Ecology chief executive Gareth Griffiths says: “Decarbonising our homes is key to meeting our net-zero ambitions.  

“The introduction of the ‘advanced payment’ mortgage option is an exciting first for Ecology, making energy efficient off-site build homes more accessible for those borrowers who may require up-front funding.  

“Our innovative approach, to secure our lending, in advance, on the modular panels while they are in the factory, has the potential to be a game-changer, helping to realise the environmental benefits of off-site construction, which will be critical in the fight against climate change.”