Norwich & Peterborough Building Society is going green in what it claims is a bid to save the planet by launching a greenhouse-gas-free discount mortgage.
The green mortgage is designed to reduce the emission of greenhouse gasses into the environment.
A residential property's energy efficiency is measured by a Standard Assessment Procedure and rated between one and 100. Developers are now being asked to build houses with a minimum rating of 80. The current average SAP rating is 60.
Norwich & Peterborough's mortgage is available on new homes with a SAP rating of 80 or above. It offers a 2 per cent discount for two years. The society's standard variable rate is currently 8.35 per cent.
The redemption penalty is one month's full interest for the first four years. The maximum loan to value is 95 per cent.
Buildings and contents insurance must be arran ged with Norwich & Peterborough.
There is a £295 arrangement fee on completion of the loan. IFAs receive a £125 procuration fee. The society offers a free property valuation.
The mortgage is available from February 23.
General manager Stephen Penlington says: "We are aware of the huge groundswell of public opinion in favour of the building and design of homes which are more environmentally friendly.
"Energy-efficient homes are not only good for the environment but cheaper to run too. By offering this incentive, we are encouraging builders to develop standards which help the homebuyer."