Green mortgages, further advances and remortgaging for solar

What “green” actually means here

It is a marketing category rather than a legal one, and it covers at least three different things:

A rate benefit tied to EPC band. The property qualifies, not the works.

Additional borrowing earmarked for efficiency measures, sometimes at a preferential rate, sometimes with evidence of the work required.

Cashback or fee incentives on completion of qualifying improvements.

Because the label is not defined, read the terms rather than the name. The questions that matter are the ordinary mortgage ones: rate, term, fees, early repayment charges, and what happens when the initial period ends.

Where the money actually goes, and why that matters

A mortgage advance lands in your bank account. You then pay the installer from it.

That has a specific consequence: section 75 does not attach. Section 75 makes a credit provider jointly liable with the supplier where the credit financed the purchase in the required way; money drawn down and then spent is not that arrangement.

So if the installer fails after taking payment, the mortgage lender is not a route of recourse. You still owe the mortgage.

The arithmetic nobody shows you

A lower rate over a longer term is not automatically cheaper. Two things to work out with your adviser, or on paper, before deciding:

Total interest over the term. £7,000 added to a mortgage with twenty years remaining is being repaid over twenty years. Even at a low rate, twenty years of interest on that balance is a real number — and often larger than a shorter, higher-rate unsecured loan.

Whether you can overpay. Many mortgages allow overpayments up to a limit without penalty. Borrowing at the mortgage rate and then overpaying to clear the addition faster captures the low rate without the long term. Whether your product allows it is a matter of the terms.

Set that against the return the installation produces — our ROI and IRR page models it at between −0.8% and 9.4% a year depending on the household. If the borrowing costs more than the installation returns, the arithmetic is against you, and that is a comparison worth doing explicitly rather than by feel.

Remortgaging specifically

Two extra costs that get overlooked:

Early repayment charges on the outgoing product, which can be substantial inside a fixed period.

Fees and valuation costs on the new one.

Both are one-off and both need to be set against the saving. A remortgage that makes sense on rate alone can fail once an early repayment charge is included — which is precisely the sum an adviser exists to do.

What to check before you commit

1. The lender’s or broker’s status on the Financial Services Register.
2. Whether any “green” condition is genuine — a rate benefit you already qualify for is not a benefit of the solar.
3. Early repayment charges, on the outgoing product and on the new one.
4. Overpayment allowances, which can turn a long term into a short one.
5. Whether the lender requires evidence of the works, and in what form.
6. How the deposit will be paid — card, for section 75.

And the thing we will not do

Tell you whether to secure this debt on your home.

It is the most consequential decision on this page, it is a regulated advice question, and the honest answer depends on your income security, your other debts, your term remaining and your tolerance for risk. Any website that gives you a confident answer to that has not asked you enough questions.