Santander and Octopus Energy have launched mortgage products that reward homeowners for energy efficiency, offering larger loans or lower rates for properties with strong eco credentials. For a typical UK household, the difference could mean thousands of pounds more in borrowing power, or monthly savings that offset the cost of retrofits.
As This is Money reported, Santander will offer a reduced mortgage rate for homes with an Energy Performance Certificate (EPC) rating of A or B, while Octopus Energy’s new mortgage product, backed by a challenger lender, allows buyers to borrow up to 5% more if the property meets certain green criteria. The catch: these deals are not yet widely available, and eligibility varies by lender and property type.
Who qualifies, and who doesn’t
Santander’s green mortgage is open to new and existing customers buying or remortgaging a home with an EPC rating of A or B. That covers roughly the top 15% of UK housing stock, mostly new-builds and recently retrofitted homes. Octopus Energy’s offer, via a partnership with a specialist lender, targets buyers of homes with solar panels, heat pumps, or high levels of insulation. Neither product covers the vast majority of UK homes, which sit at EPC D or below. For those with a typical 3-bed semi rated EPC D, the deals are irrelevant unless they first upgrade.
What it costs a typical 3-bed semi
A 0.25% rate reduction on a £250,000 mortgage saves about £625 a year in interest, not life-changing, but enough to cover the annual running cost of a heat pump. The bigger prize is the 5% extra borrowing headroom on Octopus’s product. On a £300,000 property, that’s an additional £15,000, enough to fund a full solar panel installation (typically £5,000–£7,000) and a battery storage system (around £4,000–£6,000), with money left over for loft insulation. Ofgem data shows solar panels can cut electricity bills by £300–£500 a year, so the extra borrowing could pay for itself within a decade.
Why this matters for UK homeowners
The link between energy performance and mortgage affordability is a structural shift. The Bank of England has noted that homes in lower EPC bands face higher insurance premiums and lower resale values. By offering financial carrots, lenders are effectively nudging the market toward retrofits, without waiting for government mandates. Energy Saving Trust figures suggest a typical semi-detached home can save £200–£400 a year on bills by moving from EPC D to C. Combine that with a mortgage rate reduction, and the total annual benefit could exceed £1,000. Yet the devil is in the detail: Santander’s deal applies only to the initial rate period, and Octopus’s product is limited to a single lender. Homeowners should check eligibility before planning upgrades.
What to do next
If you’re buying or remortgaging, get your EPC certificate updated, it costs £60–£120 and can unlock a better rate. If you’re at EPC D or below, consider a retrofit plan that targets at least a C rating: loft insulation (£300–£500), cavity wall insulation (£500–£1,500), and a smart thermostat (£150–£300) are the quickest wins. The government’s Boiler Upgrade Scheme offers £7,500 off a heat pump installation, and the Great British Insulation Scheme provides discounts for low-income households. Applications for Santander’s green mortgage are open now; Octopus’s product launches in November. Act before March 2027, when some grant schemes may close.
Frequently Asked Questions
Check your EPC rating on the gov.uk EPC register. A or B qualifies for Santander's deal. For Octopus's product, you need specific features like solar panels or a heat pump, even if your EPC is lower. Ask your lender directly.
Yes, both Santander and Octopus offer remortgage options. Santander's rate is available for existing customers switching deals. Octopus's product is for new purchases only initially, but may expand.
