Nationwide Building Society is hiking the amount its mortgage customers can borrow interest-free to make their homes “greener” after seeing low take-up of its previous offering.
The society is offering interest-free loans of up to £20,000 to help its mortgage customers make their homes more energy efficient.
The 0% green additional borrowing products, which need to be spent on improving a property’s energy efficiency, enable Nationwide mortgage holders to borrow between £5,000 and £20,000 up to a maximum of 90% loan-to-value (LTV) across a two or five-year term.
Nationwide previously launched green borrowing at 0% in June 2023, with the maximum limit set at £15,000.
We believe the UK's 2050 net zero target can only be met through incentivising people to invest in their homes
But it said take-up has been low, with just 1,900 applications completed since the launch until the end of September 2024, totalling £21.1 million in lending.
The average loan handed out under the initiative has been for about £12,300 and the 0% product represents about 8% of Nationwide’s total additional borrowing applications.
Nationwide is also removing a requirement for new customers to wait six months before becoming eligible to apply for the loan. Customers can now apply for enhanced green borrowing as soon as their mortgage has completed.
The society said it hopes that removing this barrier will also encourage more people to apply.
Graham Lloyd, Nationwide’s head of strategy and sustainability, said: “We believe the UK’s 2050 net zero target can only be met through incentivising people to invest in their homes.”
The society said it wants to see more public awareness campaigns showing people the benefits of retrofitting and linking to information and advice.
It also called for the creation of a national retrofit hub, supporting consumers through retrofitting from start to finish.
The society’s own customer research indicated that many homeowners judge retrofit success by a reduction in bills, and 0% borrowing tends to appeal to those already interested and planning a retrofit change.
The 0% green additional borrowing home loan is available via Nationwide’s mortgage advisers as well as brokers.
All of the loan must be used to fund non-structural, energy-efficient home improvements, such as solar panels, air source heat pump, window upgrades, boiler upgrades, cavity wall insulation, loft insulation or an electric car charging point.
Members can use any local or national contractor or supplier for the work, Nationwide said.
