19 Aug Thinking about Home Improvements?
Green Homes Grant & Home Improvement Loans
In case you haven’t been following the news, mortgage rates reached record lows during the summer of 2020. With the Green Homes Grant also due to launch this summer many people are thinking about home improvements. But who can apply for the £5,000 green home improvement scheme and what does it cover? How can homeowners benefit from low- cost borrowing?
Green Homes Grant
The Green Homes Grant gives eligible households vouchers up to £5,000 towards the cost of energy-efficient improvements. The scheme will allow homeowners and landlords to apply for a voucher that will fund at least two-thirds of the cost of hiring tradespeople to upgrade the energy performance of their homes.
More than 600,000 homes have now been revealed to be eligible for the Grant which could help families save up to £600 a year on their energy bills. For most homeowners, the vouchers will be worth about two-thirds of the cost of the energy-efficient improvements, up to a maximum of £5,000 per household. There are also boosted £10,000 vouchers for low-income households, where the homeowner won’t need to pay anything towards improvement costs. This will be for those receiving at least one income-based or disability benefit.
To qualify for the scheme, you’ll need to be installing at least one of the following “primary” improvements:
- Insulation, including solid wall, cavity wall, under-floor, loft, or roof insulation.
- Low carbon heating, such as air source or ground source heat pumps, or solar thermal systems.
If you already have these measures installed, you can use the vouchers to install “top-ups” – for example, additional loft insulation so it reaches the recommended level – but not to replace what you already have. The Government also adds that if you’re installing low carbon heating, you’ll also need to have adequate insulation in your home, though this can be installed at the same time as the heating. Then if, and only if, you’re installing at least one of the improvements above, you’ll also be able to use the vouchers to install the following “secondary” measures:
- Double or triple glazing, or secondary glazing, but only if you currently have single glazing – it won’t cover replacement double glazing.
- Energy efficient doors, where you’re replacing doors installed before 2002.
- Heating controls and insulation, including appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed-start thermostats and thermostatic radiator valves.
You can only receive funding for these secondary improvements up to the amount of funding you’re receiving for the primary measures. So for example, if you’ve received £1,000 towards cavity wall and roof insulation, you can only receive a maximum of £1,000 towards any secondary measures, such as double glazing or thermostats. Further details on how to apply for a voucher will be announced by the government ahead of the scheme’s full launch in the Autumn. More information: https://www.gov.uk/government/news/quality-assurance-at-heart-of-new-2-billion-green-homes-grants
Home Improvement Loans
For most homeowners who are looking at home improvements, a home improvement loan (also known as a “secured” or “further” loan) may be a viable option. Assuming your credit score qualifies you for the top mortgage rates available, there are some very attractive products out there and many homebuyers can get great deals.
Lee Howard of Howard Mortgages states, “With interest rates currently at a record low, this good news for the majority of borrowers who can take control of debt with low-cost borrowing. Many homeowners may be able to refinance and reduce their overall mortgage payments.”
The mortgage rate and product that is suitable for you depends on your financial situation, the home you’re buying and the area where you live. But before you rush into refinance, take the time to talk it through with a professional mortgage advisor.
With such bespoke mortgages that are only available from certain lenders, speaking to a professional mortgage adviser that works with many lenders is imperative. For advice on the right mortgage to suit your personal circumstances, please contact Lee or the team at Howard Mortgages on 01803 554455 or contact us here.
Your home may be repossessed if you do not keep up repayments on your mortgage.