The Co-Operative Bank Mortgage is a CAT-standard flexible mortgage that addresses borrowers concern for the environment.
This flexible green mortgage marks Co-Operative Banks return to the mortgage market after a 10-year absence. It allows overpayments, underpayments and lump sum withdrawals to be made at any time. Interest is calculated daily and borrowers can also take payment holidays, which make it more flexible than some products on the market.
As a condition of the mortgage, borrowers have to make a donation of £10 to Climate Care a scheme which helps tackle global warming for the duration of the mortgage. Climate Care will use the donations to plant trees which will absorb about 20 per cent of the carbon dioxide emitted by houses. As the donation is such a small part of the average home loan, it appears to be just a gimmick.
For loans up to 75 per cent loan to valuation, the Co-operative Bank has a rate of 6.85 per cent with a 0.6 per cent discount for six months. This is not competative compared to Intelligent Finances rate of 6.8 per cent with a 1.5 per cent discount for six months.
For loans up to 95 per cent loan to valuation, the Co-Operative Bank has a rate of 7.05 per cent with a discount of 0.6 per cent for six months. Standard Lifes rate of 6.95 per cent with a 1.7 per cent discount for six months is lower. However, its flexibility is compromised as underpayments are not allowed.