Mortgage Overview
A mortgage is the biggest loan most people will take out in their lifetime. But just how is this loan funded?
Who else does your mortgage provider do business with? Might they also lend to big corporations involved in areas you don't approve of? Do they lend responsibly to their customers and offer assistance to those who fall into financial difficulty? Do they offer incentives to environmentally-sound projects?
If you're thinking of buying property or your existing mortgage is up for renewal, this section will help you find a green and ethical provider.
Find out about your current or prospective provider
What are the green and ethical options?
Find out about your current or prospective provider
Use the mortgage search to find out more about your current or prospective mortgage provider's green and ethical credentials. Key areas considered are responsibility toward customers, financial exclusion, equal opportunities, environment and also whether they have an ethical lending policy or guidelines in place.
Responsible lending
The importance of responsible lending cannot be overemphasized. The recent global economic downturn is often attributed to the 'sub prime crisis'. This refers to the granting of loans to people who are considered to be in higher risk categories - those more likely to default or who have a poor credit history, for example.
This type of lending is not problematic in itself - credit unions and community development finance institutions regularly lend to sub prime candidates.
Instead, irresponsible lending to customers in the sub prime category is the problem. In the build up to the crunch some financial institutions were lending 100% mortgages (and in some cases more) to people who would not be able to make their repayments in the long term.
Key questions to ask: Does your bank have responsible lending policies that ensure that its products are targeted in an appropriate manner? And does it provide advice or debt management services to customers who fall into financial difficulty?
What are the green and ethical options?
- Co-operative Bank: has a well-recognised ethical policy in place that governs all its lending decisions and products including mortgages. It also offers a specific Green Mortgage and re-mortgage product. Additionally it offers a reduced-rate loan to mortgage customers wishing to purchase and install energy efficient home technologies from an approved list.
- Ecology Building Society: has an 'ecological' lending policy which applies across all lending practices. It offers a number of green mortgage options.
- Norwich & Peterborough Building Society: offers a Green mortgage which plants 40 trees per mortgage and available for new homes with a Standard Assessment Procedure (SAP) rating of 100 or higher or to those looking to make their home more energy efficient. It also offers a Brown mortgage which includes a free energy survey and advice on making property energy efficient.
Your next steps
Check out our Next Steps Guide - Mortgages for suggestions on how to find the right green and ethical mortgage provider for you as well as the questions you should be asking your current or prospective provider.
Mortgage Search
 |
 |
 |
 |
 |
 |
 |
 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
 Financial Institution |
Criteria | |||||||||||||||
|
|
|
|
|
|
|
9.09 | |||||||||
|
|
|
|
|
|
|
|
25 | |||||||||
|
|
|
|
|
|
|
|
13.3 | |||||||||
|
|
|
|
|
|
|
|
25 | |||||||||
|
|
|
|
|
|
|
|
11.76 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
9.09 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
11.1 | |||||||||
|
|
|
|
|
|
|
|
10 | |||||||||
|
|
|
|
|
|
|
|
27.3 | |||||||||
|
|
|
|
|
|
|
|
37.5 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
10.5 | |||||||||
|
|
|
|
|
|
|
|
14 | |||||||||
|
|
|
|
|
|
|
|
25 | |||||||||
|
|
|
|
|
|
|
|
10.5 | |||||||||
|
|
|
|
|
|
|
|
31.2 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
27 | |||||||||
|
|
|
|
|
|
|
|
14.28 | |||||||||
|
|
|
|
|
|
|
|
10.5 | |||||||||
|
|
|
|
|
|
|
|
25 | |||||||||
|
|
|
|
|
|
|
|
14.3 | |||||||||
|
|
|
|
|
|
|
|
20 | |||||||||
|
|
|
|
|
|
|
|
5.88 | |||||||||
|
|
|
|
|
|
|
|
33 | |||||||||
|
|
|
|
|
|
|
|
10 | |||||||||
|
|
|
|
|
|
|
|
15.4 | |||||||||
|
|
|
|
|
|
|
|
5.88 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
10 | |||||||||
|
|
|
|
|
|
|
|
8.33 | |||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
9.09 | |||||||||
|
|
|
|
|
|
|
|
11.1 | |||||||||
|
|
|
|
|
|
|
|
18.2 | |||||||||
Mortgage Provider
Bank of Ireland (UK)
Green/Ethical Products
- Basic Bank Account
- Alburaq product range (Shariah)
- Giraffe Carbon Offset mortgage (online product)
Ethical Lending or Insurance
No evidence of a policy found. The Alburaq product range does apply principles of Shariah law, however.
Responsible Lending
1. Credit Lending
Bank of Ireland offers a standard 90% LTV (loan-to-value) rate for house purchase/re-mortgage. This compares favourably with the FSA’s recent Turner Review which suggests that LTV (loan-to-value) rates be set at 90%, i.e. that borrowers should have at least a 10% deposit for a mortgage. The bank offers 92% LTV for first time buyers.
The bank also offers a 4.5 times LTI (loan-to-income) rate to single borrowers, 4 times for joint borrowers (or 4.5 plus 1) while the Turner Review suggests just 3.5 times.
In terms of running credit checks, the bank states that it does an assessment to determine how much customers can afford to borrow and the most appropriate type of borrowing. It looks at income and financial commitments and the customer’s financial history as well as information from credit reference agencies and a ‘credit score’. The credit score works out the risk of defaulting on repayments. It also takes into consideration what security the customer can provide.
No policy was found related to the avoidance of unrequested increases in credit limits.
2. Debt Warning
The bank requires customers to read its ‘Personal Banking Guide’ before buying a product – this includes details of credit checks, warns about careful budgeting and recommends payment protection plans to help against unforeseen financial difficulties.
Customers in Northern Ireland are given a warning about home repossession resulting from failed repayments on mortgages or other secured loans.
No warnings were found on the consequences of failing to make payments on unsecured loans. No evidence that the bank avails of the FSA Debt Test was found either. This facility is designed to help customers find out whether they have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulties.
3. Debt Management and Advice
Options offered to customers experience difficulty making payments include possible regular or fixed repayments for debts, reducing or suspending repayments for a set time.’
The bank refers customers to free advice services including the Citizens Advice Bureau and the Consumer Credit Counselling Service (CCCS).
The bank states that it offers up to two payment breaks per year (up to two months) on personal loans (unsecured). It further states that payment free month(s) must be selected prior to completion of a loan and that the monthly repayment amount will increase as a consequence. No similar service was found for secured loans (mortgages).
Similarly, no information was found regarding re-housing advice or liaison with organisations such as Shelter and the Citizens Advice Bureau to work out re-housing arrangements with mortgage customers facing repossession. The bank does not outline the steps leading up to repossession of property/court action.
Financial Exclusion
The bank offers a basic bank account to low income customers.
In terms of access for potentially excluded groups, Bank of Ireland has made the following provisions:
- Migrant Worker Initiative - translation of 10 key product/service brochures and welcome pack on account opening in foreign languages such as Polish, Russian and Chinese
- Polish Telephone Line - advice on all products and services to Polish-speaking customers
Environment
Bank of Ireland’s policy addresses the key areas of energy efficiency and waste management. An environmental management system is in place to monitor and improve performance.
Carbon Neutral
No pledge to make business operations carbon neutral was found.
Equal Opportunities
No evidence of policy found with regard to gender, race or sexuality. However, the bank reports that it employs people with disabilities. Its Customer Operations has a long track record of recruiting people with a disability and in recognition of this was awarded the 'Overall O2 Ability Award Best Practice - Private Sector' Company in 2006.
Women on the Board
According to figures from 2008, 13.3% of board members are women.
Voluntary Standards & Initiatives
Bank of Ireland (UK)
UK:
- Business and Corporate Banking
Northern Ireland:
- Current Accounts
- Savings
- Credit Cards
- Investments
- Mortgages
- Insurance (Home)
- Student Current Account
Bank of Ireland (UK)
Bank of Ireland (GB)
Customer Care
Bow Bells House
1 Bread Street
London
EC4M 9BE
