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
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Mortgage Provider
National Counties Building Society
Green/Ethical Products
None
Ethical Lending or Insurance
No evidence of policy, however, as a mutual building society, the bulk of National Counties’ business is with private individuals rather than companies and they are therefore less likely to be exposed to problem areas like arms manufacturing, nuclear power or companies with poor environmental records.
Responsible Lending
1. Credit Lending
National Counties offers a maximum LTV (loan-to-value) rate of up to 75%, which is secured on wholly residential property and subject to confirmation of status with no adverse credit history. This compares favourably with suggestions made in the FSA’s Turner Review that a maximum of 90% of a property’s price be loaned i.e. that borrowers should have at least a 10% deposit.
The building society offers an LTI (loan-to-income) rate of up to 4.33 for single or joint applications depending on mortgage term this contrasts with the Turner Review’s suggestion of just 3.5 times the annual wage of a single mortgage applicant.
2. Debt Warning
The building society issues the generic warning: ‘Your home may be repossessed if you do not keep up repayments on your mortgage.’ It also states that additional security may be required.
The building society does not use the FSA Debt Test. This test is designed to help customers find out whether you 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
Payment holidays and reduced monthly repayments may be available on some mortgage products and in cases of earlier overpayment though full details are not publicly available.
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
No evidence of policy or provisions for financially excluded customers.
Environment
No evidence of an environment policy.
Carbon Neutral
No pledge was found on making business operations carbon neutral.
Equal Opportunities
No evidence of an equal opportunities policy.
Women on the Board
14.3% of board members are women (2007).
Voluntary Standards & Initiatives
None
National Counties Building Society
- Savings
- Mortgages
National Counties Building Society
National Counties Building Society
30 Church Street
Epsom
Surrey
KT17 4NL
