Nationwide launch Green Deal alternative
Nationwide has launched a loan for household energy efficiency improvements, which threatens to reduce the uptake of the Government's corresponding Green Deal.
Coming into effect from today, the loan, called Green Additional Borrowing, has a substantially lower interest rate of 2.29% compared to the Green Deal’s rate of up to 6.9%.
The loan can be used to fund a variety of energy efficiency measures such as insulation, ground source heat pumps, double glazing and solar PV.
Customers can borrow between £5,000 and £20,000 and will have an open market choice of suppliers giving them the opportunity to select a national brand or a local firm.
Nationwide head of group mortgages Tracie Pearce said: “Energy bills continue to rise and many customers are looking to make energy efficient home improvements to try to reduce their bills in the longer term.
“Green Additional Borrowing allows existing Nationwide mortgage customers, who are looking to make their home more energy efficient, the chance to borrow at a competitive rate of interest, with rates 0.50% lower than our standard further advance rates,” she added.
Nationwide has claimed its loan is not a direct competitor to the Green Deal.
“We see this product as complementary to the Green Deal, which we have welcomed.
“Green Additional Borrowing offers an alternative way of funding larger home improvements and can be used if the customer’s preferred approach does not meet all the Green Deal requirements,” said Pearce.
However, critics of the Government’s Green Deal, launched last Monday,have often pointed out that the Green Deal’s high interest rate could deem it uncompetitive.
On the day of its launch Friends of the Earth Head of Campaigns Andrew Pendleton said: “The interest rate on loans is bound to undermine the Green Deal’s appeal to cash-strapped households.”