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Green loan from the Co-op Bank

Co-operative Bank is offering a green fixed-rate loan with ecology-friendly features.

The loan, fixed at 5.39 per cent until April 30, 2005, provides a free home energy rating report with the property valuation.

The report covers the energy efficiency of the property and points out areas which can be improved financially and environmentally.

Throughout the duration of the loan, the Co-op will make an annual donation to environmental charity Climate Care, which aims to tackle global warming by sponsoring reforestation around the world.

The bank says it has developed the mortgage after extensive consultation with the Worldwide Fund for Nature and Forum for the Future, because housing is one of the biggest sources of carbon dioxide emissions in the UK.

Loans are available for purchase or remortgage up to a maximum of 95 per cent loan to value. For remortgages, the Co-op will pay legal and valuation fees.

Borrowers can also create a flexible fund by overpayment, which can be used to repay up to 10 per cent of the loan each year without penalty.

Redemption penalties are 3 per cent in year one, 2 per cent in year two and 1 per cent in year three.

Deputy chief executive Mick Firth says: “We returned to the mortgage market in 2000 with our flexible loan. Our new fixed-rate mortgage provides a further option which we bel-ieve will be attractive to many borrowers.”

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