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Still no definition of a green mortgage

Despite more lenders jumping on the green mortgage bandwagon after the Budget last week, there was still confusion surrounding what a green mortgage even is.

In Gordon Brown’s speech last week, the chancellor encouraged banks and societies to launch environmentally-friendly products to help home owners cut down on their housing-based carbon emissions.

Following this, both HBOS and Abbey unveiled plans to launch green loans joining lenders such as Ecology and Norwich and Peterborough.

Both lenders say there are no detailed designs of what a green product offering would consist of. Sources within HBOS say it could consist of a tax wrapper surrounding a wide range of products that would offer financial rebates for eco-friendly features in the home.

Co-operative Bank also unveiled plans to go greener, saying it is working on new eco-features that will be built into its mortgage portfolio, but again did not disclose what these features will be.

However, even existing green mortgage lenders say there’s no set definition for a green mortgage, causing some to criticise green loans as just marketing gimmicks.

Industry pundits say if the chancellor wants home owners to go green, he should be offering financial incentives. Friends of the Earth has called for 1.4bn to fund a national scheme of Council Tax rebates for those wishing to make their homes more environmentally-friendly.

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