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
Mortgage Provider
Birmingham Midshires
Green/Ethical Products
None
Ethical Lending or Insurance
The bank does not lend commercially.
Responsible Lending
1. Credit Lending
Birmingham Midshires offer an LTV (loan-to-value) rate of up to 85% depending on the customer’s circumstances. This compares favourably with the FSA’s Turner Review suggestion that a maximum of 90% of a property’s price be loaned i.e. that borrowers should have at least a 10% deposit for a mortgage.
The bank does not publish its LTI (loan-to-income) rates. The Turner Review suggests lending 3.5 times the annual wage of a solo borrower.
The bank does not offer unsecured credit, for example personal loans.
2. Debt Warning
The bank issues a warning on repossession which includes information on negative equity.
No information was found as to whether the bank uses the FSA Debt Test or an equivalent system. 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 difficulty.
3. Debt Management and Advice
No information was found regarding policies on payment default and handling payment problems.
The bank states that repayment holidays and underpayments are available after the first six monthly payments have been made and are subject to terms and conditions, but these are not specified.
No information was found as to whether the bank offers re-housing advice or liaises with organisations such as Shelter and the Citizens Advice Bureau to work out re-housing arrangements with mortgage customers facing repossession.
Financial Exclusion
In terms of providing access for potentially excluded customers, the bank offers services including Typetalk and documentation available in large print and Braille or on audio tape.
The bank also runs a community grants scheme to support local development projects.
Environment
Parent company, HBOS’s, environment policy applies across the group and covers the key areas of climate change/energy efficiency and waste management. The policy also contains a commitment to continued improvement in performance via an organisation-wide environment management system.
Carbon Neutral
HBOS’s business operations became carbon neutral in 2007.
Equal Opportunities
HBOS’s group-wide policy takes into consideration the key equality issues of race, gender, sexuality and disability.
Women on the Board
No data found
Voluntary Standards & Initiatives
Not by itself but parent company a signatory/member of:
Charitable Giving
Birmingham Midshires raised £1m for the housing and homelessness charity Shelter through its ‘Raising, Giving and Volunteering’ programme. The bank has also extended the Wolverhampton Wanderers Community football scheme to a disability program which includes the support of Wolverhampton Wanderers Deaf Football Club.
Birmingham Midshires
- Savings
- Mortgages
Birmingham Midshires
Birmingham Midshires
Customer Relations Team
PO BOX 81
Pendeford Business Park
Wobaston Road
Wolverhampton
WV9 5HZ
