NatWest and Add To My Mortgage have announced funding from the Department for Business, Energy and Industrial Strategy’s (BEIS) Energy Innovation Programme for a new pilot initiative to make it easier for consumers across the UK to ‘go green’ on their home heating.
As part of the Green Home Finance Innovation Fund, the bank facilitated a submission by Add To My Mortgage, securing £1.1m funding to build a platform that allows those purchasing green home energy systems, such as heat pumps, to more easily obtain finance via their mortgage.
Heat pumps differ from traditional boilers in that they use electricity to generate heat using a technique called reverse refrigeration. They are more expensive than gas boilers (approximately £8,000-£10,000, compared to a new boiler which costs approximately £2,500) but are more eco-friendly and durable, lasting for 15 to 20 years and can save 0.8 tons of CO2 per capita per year.
Despite the climate benefits, Add To My Mortgage had identified the lack of traditional finance offerings as a barrier to their uptake. This pilot programme, which will now move into development, is aimed at allowing homeowners to quickly and simply invest in green home improvements using their existing mortgage, at the point of sale. The mortgage team at NatWest will provide expert insight and guidance into the effective construction of the system.
Lloyd Cochrane, customer goal lead, home buying and ownership at NatWest, said: “We think this is an important move that the industry should support, and it’s why we’re proud to be working with the team at Add To My Mortgage to develop practical yet innovative ways that people can achieve their own green ambitions and save money on their household bills.
“We’re committed to supporting people, families and communities in fulfilling their potential – helping them to go green in their choices around housing is an important part of that.”
Rory Duff, CEO of Add To My Mortgage, added: “We’re delighted to be working with NatWest and the Department for Business, Energy and Industrial Strategy to deliver the Add To My Mortgage platform. Together with the mortgage industry and manufacturers and installers of green home energy products, our goal is to mobilise the money needed to make green home improvements a reality.
“We believe this can provide a substantial boost to the green economy as we recover from the impact of Covid-19.”