The Green Addition Borrowing mortgage range enables customers who make green home improvements to benefit from cheaper rates.
It comes as a survey revealed over three fifths of individuals in the UK believed mortgages should be cheaper for those who carry out green home improvements.
But, the study by electricity and heat producer and retailer Vattenfall, also found many householders were confused about what these upgrades should be.
Indeed, fewer than one in four said they would know what kind of heating system they would need if gas boilers had to be replaced with low-carbon alternatives, for example.
TSB’s new range is open to existing buy-to-let or residential mortgage customers and will allow them to borrow £10,000 or more – up to 85% loan-to-value (LTV) – to fund a range of green home improvements which include: loft and wall insulation, a heating upgrade or solar panel installation.
Customers must spend a minimum amount of £1,000 for ‘green’ improvements as part of overall total advance.
They receive rate reductions of 0.50% (with no product fee), where it is used to fund improvements that will reduce the emissions from their homes. Where the borrowing is to fund a mixture of ‘green’ and other improvements, then just the green part of the borrowing will benefit from the reduced rate.
Nick Smith, TSB’s head of mortgages said: “We are all conscious of the need to do more to protect the environment and we know that a lot of our customers are also keen to play their part in tackling climate change.
“So we’ve decided to give our mortgage customers a helping hand, by offering them a discount when they borrow to invest in the energy efficiency of their homes.”
And Dr Rhian-Mari Thomas OBE, chief executive of the Green Finance Institute explained innovation and transparency would be essential for scaling-up the green mortgage market and accelerating the decarbonisation of UK homes.
She said: “Today’s announcement about the launch of TSB’s Green Additional Borrowing mortgages – which align with the industry-backed Green Home Finance Principles, established by the Green Finance Institute – is a welcome contribution to creating a thriving market for green mortgages in the UK.”
