Last reviewed: June 2026
TL;DR- Eco mortgage is a marketing term used by some lenders for green or energy efficient mortgage products - there is no single standardised definition.
- Products marketed as eco mortgages typically require an EPC A or B rating and offer a rate discount, cashback or improvement finance at a preferential rate.
- Some eco mortgage products extend beyond EPC rating to other environmental credentials such as sustainable construction materials or biodiversity net gain.
- The eco mortgage market is developing - lenders' specific product criteria and availability should be checked directly or through a broker.
What Is an Eco Mortgage?
The term "eco mortgage" is used by some lenders as a brand name for their green or energy efficient mortgage products. It is not a distinct regulated product category - like "green mortgage" or "sustainable mortgage," it is a marketing description. Products marketed as eco mortgages typically share characteristics with green mortgages: preferential rates for properties with high energy efficiency ratings (EPC A or B), cashback at completion, or preferential additional borrowing for energy improvement works.
Some lenders use eco mortgage branding specifically to distinguish products that go beyond EPC rating to consider broader environmental credentials: the carbon footprint of the property's construction materials, the presence of biodiversity net gain measures, water efficiency, or the property's proximity to sustainable transport. These broader criteria are less common and less standardised than EPC-based green mortgage criteria.
Relationship to Green and Energy Efficient Mortgages
Eco mortgage, green mortgage and energy efficient mortgage are largely interchangeable terms in the UK market at the time of writing. The products they describe are similar: preferential mortgage terms for properties meeting defined energy or environmental performance criteria. Lenders use different brand names for comparable products. When comparing products, the key criteria to assess are: what EPC rating or other metric qualifies; what the rate discount or cashback is; and whether improvement borrowing is available and at what terms.
Self-Build and Custom Build Eco Homes
Self-build and custom-build properties designed to high environmental standards - Passivhaus, BREEAM, zero-carbon homes - may qualify for eco mortgage products where their EPC rating meets the threshold. Passivhaus and similar very-low-energy standards typically achieve A ratings. Self-build mortgage lenders with green product ranges may offer preferential rates at the point of refinancing after practical completion. The sustainability credentials of the construction (materials, embodied carbon, water efficiency) are a consideration for some specialist eco lenders beyond the EPC rating alone.
The Future of Eco Lending
Regulatory pressure on lenders to assess climate-related financial risk in their mortgage books, combined with government energy efficiency targets, is likely to drive further development of eco and green mortgage products. The Prudential Regulation Authority and FCA have both addressed climate risk in financial services regulation. Mortgage portfolios are increasingly assessed on their average EPC rating and exposure to physical climate risk (flood, heat). This systemic pressure is likely to increase the commercial incentive for lenders to offer eco mortgage products over the coming years.
Frequently Asked Questions
Is an eco mortgage the same as a green mortgage?
In most cases, yes - the terms are used interchangeably by different lenders to describe comparable products that offer preferential mortgage terms for energy efficient properties. Some lenders use eco specifically for products with broader environmental criteria beyond EPC rating. Comparing the actual product criteria (EPC requirement, rate discount, cashback, improvement borrowing availability) is more useful than focusing on the product label.
Do Passivhaus homes qualify for eco mortgage products?
Passivhaus homes typically achieve EPC A ratings due to their very-low-energy design. An EPC A rating qualifies for most green and eco mortgage products. Some specialist lenders also recognise Passivhaus certification or other sustainability standards as an independent qualifying criterion. The specific lender's product criteria should be confirmed before assuming a Passivhaus home will qualify.
Can I get an eco mortgage for a property I plan to retrofit to a low carbon standard?
Some lenders offer transitional eco mortgage products - a standard or mildly preferential rate for the initial purchase, with a rate improvement or cashback available once defined improvements are completed and verified (typically by a new EPC). Green or eco additional borrowing at preferential rates may be available to fund the retrofit. The sequencing of the mortgage and the improvement finance should be planned carefully with a broker familiar with green mortgage products.
Are lenders required to offer eco or green mortgage products?
No. There is no regulatory requirement for lenders to offer green, eco or energy efficient mortgage products. These are commercially developed products in response to market demand, ESG investor expectations and emerging regulatory direction around climate risk. The FCA and PRA expect firms to manage climate risk in their portfolios, but the specific product offerings are commercially driven rather than mandated.
