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
Bristol & West
Green/Ethical Products
- Alburaq Home Finance (Islamic finance in association with ABC International Bank)
Ethical Lending or Insurance
Bristol & West is a mortgage provider and does not lend commercially.
Responsible Lending
Bristol & West offers mortgages for new customers through the Post Office only and the maximum LTV is 80%. This compare favourably with the FSA’s Turner Review which suggests that LTV (loan-to-value) rates be set at 90%, i.e. borrowers should have at least a 10% deposit for a mortgage.
The bank has not publicly disclosed its LTI (loan-to-income) rate for mortgage products. The Turner Review’s analysis suggests lending to 3.5 times of income for single borrowers.
The bank applies lending criteria which take into consideration the potential borrowers credit history which must be clear for three years with no mortgage, rent or loan arrears. It also allows for a maximum of two consecutive missed payments on credit or store cards but not a county court judgement (CCJ) to £250 within the previous 12 month period.
2. Debt Warning
No evidence was found that Bristol & West avails of the FSA Debt Test. This facility is designed to help customers find out whether they have, or are likely to have, problems with borrowing. The bank has a ‘Borrowing Calculator’, which calculates how much customers can borrow based on annual income and monthly outgoings. It offers no warning except the generic: ‘Your home may be repossessed if you do not keep up repayments on your mortgage.’
3. Debt Management and Advice
No data was found as to whether the bank has policies on payment default or handling payment problems. Similarly nothing was found with regard to the stages involved in the repossession process or moving to court action.
Payment holidays are offered for a limited range of products and circumstances, and the applicable timeframe is not clear.
No information was found regarding re-housing advice or working with organisations such as Shelter and the Citizens Advice Bureau to work out re-housing arrangements with mortgage customers facing repossession.
Financial Exclusion
No evidence of policies or provisions.
Environment
The parent company’s (Bank of Ireland) environment policy statement says that it is committed to pollution prevention through the ongoing identification and control of those significant environmental impacts associated with its activities. These include:
- Carbon dioxide emissions
- Water consumption
- Paper consumption
- Waste management
- Electricity and space heating
- Lending activities
- Supplier and subcontractor control
Furthermore, Bank of Ireland says it is committed to a process of continuous improvement of environmental performance.
Carbon Neutral
No evidence was found of a pledge to make the bank’s business operations carbon neutral.
Equal Opportunities
A policy exists but it does not address sexual orientation.
Women on the Board
No data found.
Voluntary Standards & Initiatives
Not on its own, but the parent company is a signatory of:
Bristol & West
- Mortgages
Bristol & West
Bristol & West
Customer Relations
PO Box 27
One Temple Quay
Bristol
BS99
