LendInvest launches bank-backed green mortgages

LendInvest launches bank-backed green mortgages
Rod Lockhart, LendInvest’s chief executive officer

Buy-to-let fintech LendInvest has launched its green mortgage range, underpinned by £1bn in funding, including the £150m it secured from Barclays and HSBC back in August.

Designed to incentivise landlords to bring up their properties to an energy performance rating of C, these mortgages offer eligible borrowers access to rates 10 percentage points lower, on average, than their non-green counterparts.

Landlords can also lock into a seven-year fixed rate of 2.88 per cent, designed to draw in those looking to remain on a low fixed rate for longer as the spectre of an interest rate hike looms on the back of rising inflation

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LendInvest’s EPiC products join its ‘mix and match’-style mortgage range, which allows borrowers to jump between development, bridge and buy-to-let loans without having to switch lenders.

“Products like this where you arrange all elements of a deal with the same lender are fantastic,” Chris Sykes, associate director at Private Finance, told FTAdviser.

“They are underwritten on their merits all at the same time and generally a client is not having to pay for more rounds of legal costs, product fees - and to an extent valuation and broker fees - than they would have to if going to two or three different lenders.”

Sykes added: “Not many lenders do this type of product. Lendinvest do already and are great with this sort of thing, so further innovation and product flexibility is always welcome.”

The fintech firm said it was also working on “additional solutions” to help borrowers offset their carbon footprint according to the environmental impact ratings (EPRs) of their properties.

LendInvest is the latest lender to launch a green mortgage range, just as the government announced yesterday (October 19) it was consulting on whether to force mortgage lenders to disclose the energy efficiency of the homes they lend on, and whether to introduce targeted energy efficiency improvements for the homes already on their balance sheets.

“By 2028, all existing private rental property will need to meet a minimum EPC rating of C, yet around 3.2m homes in this sector have an EPC rating of D or below,” said Rod Lockhart, LendInvest’s chief executive officer.

“It is therefore imperative that lenders provide property finance solutions that encourage borrowers to improve both the energy efficiency and environmental impact of their properties.”

As of 2025, all buy-to-let properties beginning a new tenancy will require an EPC rating of C, whilst existing tenancies have until 2028.

But despite strong recommendations by the government for all residential properties to have an EPC rating of 'C' or higher by 2028, financial advisers are still rarely - if ever - having the EPC conversation.

This is because many brokers don’t believe it likely that EPC ratings will affect property values anytime soon. But other industry experts, including lenders, have argued the contrary.