Behind the green door. How homeowners can combat climate change

From 'carbon offsetting' mortgages to energy-saving renovations and a complete

eco-makeover, Chiara Cavaglieri looks at how homeowners can help the planet

eco-makeover, Chiara Cavaglieri looks at how homeowners can help the planet

After a week in which we've been told that global sea levels are set to rise by a metre or more before the year 2100, at almost double the rate the UN predicted only two years ago, climate change warnings are ringing loud and clear. There are a number of ways, though, in which homeowners can do their bit for the planet by reducing their carbon footprints.

Pay for your home the green way

Green mortgages usually involve the lender contributing money towards carbon offsetting, often through planting trees or donating money to environmental charities.

The biggest players are the Co-operative bank and Ecology building society, though both Norwich & Peterborough building society and the Halifax offer mortgages with at least a bit of a green tinge.

The Co-op introduced its green mortgages in 2000 and claims to have offset over 260,000 tons of carbon dioxide emissions since then. For each year that a customer holds a Co-op home loan, it will make a payment to the Climate Care organisation to offset a fifth of a typical UK home's emissions. The bank also offers an "energy efficiency" loan at special rates to customers who need to borrow more to fund carbon-reducing changes to their homes.

The Ecology will only lend to properties deemed to have some kind of environmental benefit, such as renovation projects and new-builds with an ecological focus. It has also introduced a C-Change mortgage discount of 1 per cent for homeowners who want to borrow extra cash for energy-saving measures.

So how competitive are these green deals? Generally, not very. As an example, the Halifax offers a mortgage that donates 0.10 per cent of the interest rate to carbon offsetting. This deal is at a fixed rate of 4.56 per cent until 30 April 2013, comes with a fee of £995 and is available to customers with a 25 per cent deposit. It would cost £570 a month based on a £150,000 interest- only loan. By contrast, Principality building society offers a fixed rate of 4.29 per cent until 31 March 2013, for the same deposit but a much smaller fee of £499. Based on the same loan, this would cost £536 a month.

The simple truth is that while green mortgages don't necessarily offer the worst rates, they are nowhere near the "best buys". And despite predictions of a bright future, they still only make up a very small part of the market. "People think it's a nice idea," says David Hollingworth at mortgage broker London & Country, "until they see that it's more expensive."

It could be that homeowners choose to go for the best deal on the market and then fund environmental projects from their own pockets. "If carbon offsetting is a motivation," says Darren Cook at financial analyst Moneyfacts, "some people may prefer to take a cheaper mortgage and arrange a donation to a green charity".

Another option is to arrange a home loan through London & Country, which will plant 50 trees every time a customer takes out any mortgage. Meanwhile, financial adviser Ethical Investors will bear the cost of two years' worth of a home's carbon offsetting, again for any deal it arranges.

Check your home's green status

Saving energy is not just for the ethically minded. Household fuel bills account for a big chunk of our incomes and energy-efficient properties will not only save money but could also interest buyers looking for a home that won't cost the earth to run.

Prospective buyers can gain an insight into a property's green credentials by checking the energy performance certificate (EPC), which forms part of the much-maligned home information pack (HIP) that sellers are required by law to provide. The certificate uses an A to G rating to reveal how energy-efficient a home is and includes suggestions on how that grade could be improved. "Following the recommendations found on the EPC will lower your fuel bills for years to come," says Philip Sellwood, the chief executive of the Government's Energy Saving Trust.

Give your home an eco makeover

According to the trust, the average UK property falls in bands D or E. "We can all take steps to make our homes more energy efficient," says Mr Sellwood. "A lot of them simply involve a change in lifestyle and habits – like minimising waste and switching appliances off. Other options – like loft insulation and double glazing, or replacing a boiler – can be more expensive and time consuming, but in the long term they will add value to your home and lower your bills."

Research by the Energy Saving Trust has revealed that property buyers will pay an average of £3,350 extra for a home with a good energy-efficiency rating.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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