Halifax will start using a property’s Energy Performance Certificate (EPC) rating in its affordability calculations from 10th December 2024.
This change aims to better reflect the impact of home energy costs on disposable income, as well as some financial benefits associated with more energy-efficient homes.
The company will support customers looking to improve energy efficiency through its Green Living Reward cashback offering and partnerships with installers of heat pumps, solar panels, and insulation.
Borrowers buying the most energy-efficient homes, those rated EPC A and B, will see an increase in the maximum amount Halifax will lend.
Currently, around 15% of UK homes are A or B rated.
Conversely, homes with the lowest energy efficiency ratings, EPC F and G, will experience a small reduction in their maximum loan amount, with approximately 3% of UK homes falling into this category.
EPC C, D, and E rated homes will not see any change in the maximum loan amount.
Halifax, part of Lloyds Banking Group, offers support for existing homeowners wanting to improve energy efficiency through Green Living Rewards, which provide up to £2,000 cash back on various energy-efficient home improvements.
The group also provides incentives on heat pumps, solar panels, and insulation through partnerships.
Amanda Bryden, head of Halifax Intermediaries and Scottish Widows Bank, said: “We know that typically, more energy efficient homes are cheaper to run. Using EPC data and energy bill analysis, we’re able to reflect that in mortgage affordability.”
