Green mortgage market grows from four products to over 90

The UK green mortgage market grew from four products in 2019 to over 90 in 2025, according to data from the Green Finance Institute cited by Which?¹. Almost 60 of those products are residential mortgages, with the remainder made up of lifetime and buy-to-let mortgages¹. A separate Which? policy report published in September 2025 put the figure at roughly 60 green mortgage products, up from four in 2019². The two figures are not directly comparable: the report predates the 2025 total and does not set out the same breakdown.

Green mortgage deals fall into three broad types: rate reductions for buyers or remortgagers of homes with Energy Performance Certificate ratings of A or B; additional borrowing for energy-efficient home improvements, such as replacing a gas boiler with an air source heat pump; and enhanced borrowing, where a lender raises the income-to-loan ratio it will accept for an energy-efficient property¹. Green mortgage rates are often around 0.1% or 0.15% below the lender's standard rate¹.

Lenders named as offering green deals include Barclays, Halifax, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest Group, TSB, Virgin Money, Accord Mortgages, Coventry Building Society, Leeds Building Society, Leek Building Society, Skipton Building Society and Yorkshire Building Society¹. The table below shows a selection of the products listed, with the type of benefit and the assessment method used.

Source: Which?, data from the Green Finance Institute, correct as of March 2026¹. SAP refers to the Standard Assessment Procedure for the energy rating of dwellings¹.

The Which? policy report said additional borrowing deals tend to be more attractive but are offered only to existing customers, and that some lenders offer interest-free additional borrowing for specific renovations¹. It also set out a framework of eight tests for heat pump financing, covering areas including a clear regulatory framework, access to finance for different groups of homeowners, good quality information and advice, and effective handling of complaints and disputes².

Why it matters for households

Green mortgage products are a small share of the overall mortgage market, but the range available has widened considerably since 2019¹. For a household buying or remortgaging a property with an EPC rating of A or B, or planning energy-efficient work such as a heat pump installation, the practical effect is that more lenders now attach a rate discount, cashback or extra borrowing to those circumstances than was the case six years ago¹.

The sums involved in the underlying work are substantial. The average cost of a heat pump installation is currently £13,500, according to the September 2025 report, while the Boiler Upgrade Scheme offers most households a grant of £7,500 towards the cost². The report states that £15,500 is the average cost of upgrading a home to EPC C and installing a heat pump after the £7,500 grant has been applied, and that repayments on a ten year loan for that amount would be unaffordable for many low income and some middle income households². It adds that the vast majority of homeowners planning energy improvements intend to use their own savings, at 81%, rather than other sources of funding².

Around 3% of UK households currently have a heat pump, and 33% of UK homeowners say they would or might consider installing one². The Climate Change Committee recommends that half of UK households should have a heat pump by 2040².

What happens next

The September 2025 report says the government has recently consulted on whether third party ownership agreements should be allowed in future². It states that Property Linked Finance is not currently available in the UK and would require a change in financial services legislation to be offered, and that Heat as a Service is not available in the UK but has been the subject of government and industry funded trials². The report recommends that consumer hire (leasing) agreements should not be allowed in this market until the government has addressed gaps in protection, and that Heat as a Service options should not be allowed until there are effective solutions to competition and choice issues arising from long contracts². It also calls for mandatory certification of heat pump installers, and says that until this is introduced financial providers should require installations funded by their products to be carried out by MCS certified installers².