Ecology residential mortgages
Our objective is to provide long-term protection for the environment and long-term value to our borrowers. We offer a competitive standard variable rate loan with low initial fees, and we calculate interest on a daily basis. There are no additional charges to pay although a higher lending charge may be payable if the Society agrees to make a high percentage advance which is outside its normal policy.
In addition, we offer the C-Change mortgage range: one which provides a discount if you make energy efficient improvements to your home; and another which offers discounts on new builds - the more energy efficient the new home, the higher the discounts.
Read on for further details or download our factsheets - The Benefits of an Ecology Mortgage (PDF*, 248K) and Our C-Change Discounts (PDF*, 239K).
Why choose the Ecology?
Who can apply for an Ecology mortgage?
What type of advice do we provide?
How much can I borrow?
How much deposit will I need?
How much will it cost each month?
What types of mortgage do you offer?
Can funds be released in stage payments?
What else do I need?
What happens if I repay early?
Where can I find out more?
About to build?
Why choose the Ecology?
- We offer a straightforward, individual approach and being a specialist lender, we have a wealth of experience to call upon.
- We try to be flexible, often considering unorthodox and unconventional types of property and projects that may have been turned down by other lenders.
- We do not use credit scoring systems, so if your project isn't a neat fit, we encourage you to call and discuss it with one of our experienced staff.
- For residential mortgages, after two years - assuming your account is well conducted - you will benefit from a long-term discount of 0.25% below our SVR for the remainder of your mortgage term.
- We reward energy efficient homes through our C-Change mortgages, which offer a discount of 1% off the mortgage rate for the part of the loan used to make energy efficient improvements to your home, or a sliding scale of discounts from 0.5% - 1.25% for new builds which provide high levels of energy efficiency.
- Unlike many lenders we will consider lending funds up front on land or the unimproved value of a building.
- All mortgage appliants can request a complimentary copy of the Green Building Bible with useful contacts and articles on low impact building.
- As an Ecology member you will also receive our regular Newsletter with news about the Society and recent case studies.
Who can apply for an Ecology mortgage?
Firstly check whether your project falls within one of our lending sectors - if you are not sure, please call our Mortgage Department. You can apply in sole or joint names and you must be at least 18 years old.
The maximum number of applicants for a single mortgage is four individuals.
To find out more, download our leaflet About You (PDF*, 386K).
What type of advice do we provide?
The Financial Services Authority (FSA) has laid down detailed rules about residential mortgages. The policy adopted by the Society under these rules is not to offer you formal advice about our products but to provide you with full information about the particular type of residential mortgage we have available so you can decide if it is what you require. We follow a similar approach in relation to our other mortgages where the FSA's rules do not apply.
How much can I borrow?
We do not consider it good practice to encourage people to take on more debt than they can afford to repay, particularly at a time of difficult economic circumstances. In deciding how much we can lend, we therefore take account of your income and the amount of deposit you have available.
Where your deposit is less than 20% we will not lend more than 2.5 times joint incomes. If the available deposit is greater that 20% then we will usually lend no more than 3 times joint incomes. Although these are our standard income multipliers, it should be noted that where a more substantial deposit is available, this multiple can possibly be extended beyond 3 times for residential applicants based on the individual characteristics of the proposal. If you think that you may need to have the advance in stage payments, please see the section below, 'Can funds be released in stage payments?'
For mortgages relying on self-employed income, or on income generated by the mortgaged land/property, we will need sight of accounts for 3 years and business plans as appropriate. We cannot lend against forecasted income.
For employed applicants the amount you can borrow is based on your gross annual income and for self-employed applicants we consider your net profit. The amount we can actually lend you will depend on an assessment of your ability to repay the mortgage. This means we will need to consider your income and outgoings to be sure you can afford the monthly repayments.
To find out more, download our leaflet About You (PDF*, 386K). Please note the 'Addendum'.
How much deposit will I need?
Although we can lend up to 85% of the purchase price or property value, which ever is the lower, a deposit of less than 20% will mean that the income multiples we use will be reduced to 2.5 times joint incomes. This reflects our desire to help reduce the risks our existing and potential members may face in an uncertain market.
Funds are released upfront against the value of the property in its current state. This also applies to land and plots for new builds. Therefore you must have a minimum of 15% deposit to purchase and where necessary working capital to start the renovation, conversion or build. As a rough guide it is advisable that your working capital be 15-20% of the total cost of the proposed works.
To find out more, download our leaflet Your Property, Your Project (PDF*, 459K). Please note the 'Addendum'.
How much will it cost each month?
As soon as we know that we can help, we will provide you with a detailed illustration showing how much your monthly repayment will be for the amount you want to borrow over the term you require.
What types of mortgage do you offer?
We like to keep things simple and offer mortgages on a traditional repayment basis, where each monthly payment includes the interest and a proportion of the capital sum borrowed. This means your debt gradually decreases year by year.
Interest-only mortgages are available where your borrowing will not exceed 80% of the expected value. In this case you would be only paying us interest and your debt would not reduce over time. We would need evidence that you had in place a suitable investment scheme, such as an endowment policy, pension plan or an established ISA (Individual Savings Account).
We also consider Part and Part mortgages, where part of the mortgage operates on a repayment basis and part on an interest-only basis. We need evidence of a suitable investment scheme or repayment vehicle that covers the interest-only element.
To find out more, download our leaflet Your Mortgage (PDF, 407K). Please note the 'Addendum'.
Can funds be released in stage payments?
If you are undertaking a renovation, conversion or new-build you might not require all the money for building costs at once. And in some cases the current valuation may not in fact be sufficient to cover the release of all the money until some of the work and been done and the valuation has increased.
In these instances, money can be released in stages, and as long as the loan-to-value is sufficient, unlike traditional stage payments, we are flexible as to when those stages occur. Where the total amount of money does not exceed 2.5 times joint income, we can make stage payments up to 85% of the property's current valuation. If the outstanding mortgage balance represents more than 2.5 times joint income, the amount released will be restricted to a maximum of 80% of the property's current valuation.
To find out more, download our leaflet Your Property, Your Project (PDF*, 459K). Please note the 'Addendum'.
What else do I need?
When you apply for a residential mortgage to renovate, convert or build a property, we require the following:
- Outline or full planning permission must have been granted.
- Plans and a breakdown of costings for the work you intend to undertake. These may be builders' quotes or your own estimates. Our valuer uses the costings and plans to assess the estimated completed property value on which the mortgage is based.
- Sufficient deposit and working capital.
We usually specify that the property should be habitable within 1 or 2 years of the initial mortgage advance. This will be dependent on the type of property, the extent of the work required and the planning conditions.
What happens if I repay early?
If during the first four years of the mortgage, you make capital repayments in any one month totalling more than 10% of your current debt, we will apply an early repayment charge of three months' interest on the amount repaid, calculated at the rate applicable at the time (but capped at the initial rate charged on the mortgage).
Where can I find out more?
You can view and/or download copies of our mortgage literature from the Mortgage literature section. Alternatively contact our Mortgage Department on 0845 674 5566 or e-mail loans@ecology.co.uk
About to build?
All of our borrowers receive a complimentary copy of the Green Building Bible with useful contacts and articles on low impact building.
If you are about to embark on your own renovation or self build project then the our factsheets (in PDF* form), produced on our behalf by the Association for Environment Conscious Building might prove useful:
Eco Renovation Factsheet (PDF, 58K)
Eco New Build Factsheet (PDF, 65K)
Sources of Help & Information (PDF, 48K)