Octopus Energy launches ‘Zero Bills’ mortgage with no energy bills for 10 years
The initiative, with lender Perenna, also unlocks cheaper mortgage rates for borrowers as they will be using more sustainable energy.
The Zero Bills mortgage rewards home buyers who move into properties with green energy technology such as heat pumps and solar panels.
The average gas and electricity bill per UK household is currently just over £1,700 a year according to NimbleFins research, so homes could be in line for a £17,000 boost to their finances.
Perenna has integrated the Zero Bills initiative into its affordability calculations and because green energy is cheaper, the homes are more affordable and therefore can have cheaper mortgage rates.
Not only offer Zero Bills customers lower rates than its standard mortgage customers, it will also reduce the deposit needed.
Octopus says this drives down the barriers to buying greener homes.
Two thirds of adults under 30 say sustainability is an important factor when looking for a home, according to Make UK Modular.
Octopus aims to accredit 50,000 homes globally by the end of 2025. It has already certified 1,000 homes through contracts with developers and housing providers.
Accredited plots span a range of tenure types, including private and shared ownership, as well as affordable and social rent, Octopus said.
Michael Cottrell, Zero Bills homes director at Octopus Energy, said: "We’ll keep innovating and partnering with like-minded companies to further speed up the move towards affordable, cleaner living.”
Perenna is a challenger on the mortgage market, offering borrowers to lock in their rates for the entire term if they want to, so their monthly payments never change. They also have no maximum age limits to help older buyers.
Rachael Hunnisett, associate director at the Green Finance Institute, said it was a "pioneering step forward for the mortgage industry".
She added: "Collaboration and innovation – ensuring that changing customer needs are at the heart of product design – is the key to transitioning the UK housing stock towards net zero.”
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