Halifax will now include a property’s Energy Performance Certificate (EPC) rating when assessing an applicant’s affordability for a mortgage.
The lender said the energy efficiency of a home had an impact on energy bills and, consequently, a borrower’s disposable income.
Halifax has made the change based on analysis of EPC ratings, as well as energy transaction and mortgage data.
It said for people buying a home with an EPC rating of A or C, it would be able to lend more. People buying a less energy-efficient home with a rating of F or G will see a reduction in the maximum loan size available to them.
There will be no change to the loans available to homes rated E or D.
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.”
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To help homeowners improve the sustainability of their property, Lloyds Banking Group (LBG) has a Green Living Rewards range that offers up to £2,000 cashback on select energy-efficient home improvements.
The group also offers incentives on energy-efficient upgrades like heat pumps, solar panels and insulation through partnerships.
This week, the government launched a consultation to reform EPCs to make them more detailed and understandable.
It said any changes would be brought in over the second half of 2026 and could include separate metrics to determine a property’s overall efficiency.
Santander improves resi affordability rate
Santander has introduced a reduced affordability rate for residential mortgage borrowers.
The bank said the change could allow customers to borrow a larger amount and reflected the November reduction in the Bank of England base rate.
The change was initially meant to go live on Wednesday but was brought in on 6 December after a short delay.
