Green Deal Finance is a way in which a home owner can pay for energy saving home improvements. The types of improvements that can be financed by a Green Deal Loan include insulation (e.g. loft, cavity wall), heating (e.g. a new boiler), double glazing and solar panels to name a few. Any home owner can apply for a Green Deal loan and there are currently no limits to how much can be borrowed.
The amount of interest added to the loan will be dependent on the amount borrowed and the length of time it is borrowed for. The repayments are added onto the homeowners electricity bill and the theory, at least, is that the repayments never outweigh the energy saved i.e. a homeowner's electricity bill should remain the same as before the improvement, however the actual energy saved may differ from the estimate.
As the repayments are added to the homeowners electricity bill the loan is "attached" to the property and not the individual who entered into the loan. This means that when a homeowner comes to sell the property, if they still have outstanding amount to repay on the loan this will pass to the buyer on completion of the sale. A potential buyer will therefore be advised not to proceed with the purchase until the homeowner has paid off the amount still due under the loan.
For Green Deal Loans taken before 16 May 2014 an early repayment charge is payable but even for those taken after this date, homeowners should be aware that if they wish to sell their property at any time during the loan period, which can be up to 25 years, they will need to finance the repayment of the outstanding amount borrowed. Something to consider before deciding if the Green Deal is right for you.
If you have any questions about how the Green Deal effects you or you are selling or buying a property we can help. Please contact us on 01392 344800 or use the contact us page.