Move aims to reflect energy costs and boost lending for efficient homes
Halifax has announced that it will begin incorporating energy performance certificate (EPC) ratings into its mortgage affordability calculations starting Tuesday, December 10.
The move aims to better account for energy costs and reflect the financial advantages of energy-efficient homes, according to the lender’s announcement.
The change means that borrowers purchasing properties with higher EPC ratings — such as ‘A’ or ‘B’ — may see a slight increase in their maximum loan amount. On the other hand, properties with lower energy efficiency ratings, such as ‘F’ or ‘G’, may face a minor reduction in loan limits. For homes with EPC ratings of ‘C’, ‘D’, or ‘E’ — or where no rating is available — affordability calculations will remain unchanged.
Halifax explained that its affordability model already factors in living costs, including energy expenses, but the addition of EPC data allows for a more tailored approach.
“We know that typically, more energy-efficient homes are cheaper to run,” said Amanda Bryden, head of Halifax Intermediaries and Scottish Widows Bank. “Using EPC data and energy bill analysis, we’re able to reflect that in mortgage affordability.”
Under the new approach, EPC ratings will also be considered in remortgage applications, product transfers, and further advance requests where a full affordability assessment is required.
Halifax’s updated mortgage affordability calculator will include an EPC rating field, which brokers can select when completing a decision in principle (DIP). If an EPC rating is unknown, users can leave the field blank. For new-build properties, predicted EPC ratings based on Predicted Energy Assessments (PEA) or Standard Assessment Procedure (SAP) ratings will be accepted. The updated affordability assessment will appear in the Application Summary document, including a section recording the EPC details submitted.
The initiative builds on Halifax’s broader commitment to supporting energy efficiency. Through its Green Living Reward programme, Lloyds Banking Group — which includes Halifax, Lloyds Bank, and Bank of Scotland — offers homeowners up to £2,000 in cashback for energy-efficient upgrades. The group has also partnered with installers of heat pumps, solar panels, and insulation to provide incentives for improving home energy performance.
Currently, only around 15% of UK homes are rated ‘A’ or ‘B’ on their EPC, while 3% are rated ‘F’ or ‘G’, according to the lender.
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