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
Smile
Green/Ethical Products
Smile is part of the Co-operative Bank. All Co-operative Bank products are covered by its customer-led Ethical Policy.
Products with a specific ethical or green element include:
- Smile sustainable funds.
Ethical Lending or Insurance
The Co-operative Bank has an ethical lending policy which applies across all its transactions with businesses seeking finance.
On applying for banking services with The Co-operative Bank, all business customers are required to complete an Ethical Policy questionnaire. The Co-operative Bank states that it will only offer a business banking facilities when it is confident that there are no conflicts with its Ethical Policy.
The ethical lending policy includes exclusion criteria in human rights; the arms trade; corporate responsibility and global trade; genetic modification; social enterprise; ecological impact, and animal welfare areas.
Since 2011 The Co-operative Bank's Ethical policy has been extended to cover the investments underpinning its home and motor insurance products. As a result it does not purchase bonds issued by organisations that do not meet the criteria of the policy.
The Co-operative bank has internal controls to monitor its lending policy as well as inviting an independent auditor to comment on the implementation of their policies and publish the findings.
The Bank states that since its launch in 1992, The Co-operative Bank has withheld over £1.2 billion of funding from business activities that its customers have said are unethical.
During 2012, 110 finance opportunities were referred to the Ethical Policy Unit in connection with international development and human rights, of which 17 were declined with an estimated cost of £2,659,000 gross income foregone.
Human Rights
The Co-operative Bank's ethical policy includes human rights criteria. It will not finance any organisation that advocates discrimination and incitement to hatred, or the manufacture or transfer of indiscriminate weapons, e.g. cluster bombs and depleted uranium munitions".
They will not finance any of the following:
- any government or business which fails to uphold basic human rights within its sphere of influence;
- any business whose links to an oppressive regime are a continuing cause for concern;
- any organisation that advocates discrimination and incitement to hatred;
- the manufacture or transfer of armaments to oppressive regimes;
- the manufacture or transfer of indiscriminate weapons, eg cluster bombs and depleted uranium munitions;
- the manufacture or transfer of torture equipment or other equipment that is used in the violation of human rights.
Since 1992, they have declined £385m finance to businesses in line with their Ethical Policy statements on international development and human rights. During 2012, 110 finance opportunities (2011:159) were referred to the Ethical Policy Unit in connection with international development and human rights, of which 17 were declined (2011: 13), with an estimated cost of £2,659,000 in terms of gross income foregone.
Financial Exclusion
No evidence of any accounts, products, or services aimed specifically at the financially excluded.
Although The Co-operative Bank, of which smile is a division, offers a range of products and services for the financially excluded.
- In 2012, 38% of the bank's branches were located in deprived areas.
- The bank also reports that finance to small businesses in deprived areas as a proportion of equivalent bank activity remains significantly above the industry average in 2012.
- The bank provides basic bank accounts to prisoners ready for use on release. 13,380 bank accounts for prisoners opened since 2009.
- The Co-operative Bank offers a basic bank account, Cashminder, aimed at those who may not be eligible for a standard current account.
No evidence for Smile however The Co-operative Bank, of which smile is a division, has the following:
Credit Union Current Account launched in 2006 in partnership with the Association of British Credit Unions Ltd (ABCUL). In 2012, 25 credit unions were offered the account and over 36,500 (2011: 33,281) customers benefited.
In line with the Bank’s Ethical Policy commitment to support credit unions, a three-year strategy was developed and agreed in 2012. Principles are to provide credit unions and their members with: an accessible, Co-operative banking package; access to a range of Group products and services; and assistance and advice.
Smile's website is ranked as meeting A-level in relation to their level of accessibility according to the Web Accessibility Initiative’s (WAI) Web Content Accessibility guidelines (where AAA is the most accessible).
No other evidence for Smile however The Co-operative Bank has the following:
The company provides the following:
- Mobile and Internet Banking.
- Templates to help customers complete cheques and paying in slips.
- Hearing induction loops in our branches to assist the hearing impaired.
- A textphone, which can be accessed by making a call through TextDirect, dialling prefix 18001 before the telephone number you want.
- Correspondence, statements, PIN advice and brochures available in large print, braille and audio formats.
- Chip and signature cards for customers who are unable to use a keypad or have difficulty remembering numbers.
- Card readers with a larger keypad and audio format for use with internet banking.
- Facsimile signature stamps for customers who have difficultly reproducing a consistent signature.
In 2007, The Co-operative Bank introduced a £25m microfinance fund to support the development of small businesses in some of the world’s poorest countries. To date, they have lent to four microfinance schemes and supported microfinance institutions in 28 countries. In 2012, they agreed a new investment of $5m in a fund supporting microfinance institutions and social enterprises in Latin America, Eastern Europe and Asia.
No evidence found that the company invests in or lends at lower rates to financially excluded communities.
Environment
Co-operative banking Group’s environmental policy covers the key areas of climate change/energy efficiency, water use and waste management.
The environmental policy also contains a commitment to continued improvement in environmental performance.
Carbon Neutral
In 2012 The Co-operative Banking Group, of which smile is a division, maintained its policy of going ‘beyond carbon neutral’ for the sixth consecutive year by offsetting its emissions plus an extra 10% of emissions to cover legacy issues (8% of total carbon offset).
Equal Opportunities
The bank’s diversity policy takes into consideration the key equality issues of race, gender, sexuality, and disability.
Women on the Board
The Co-operative Banking Group:
2/12 women hold top level board positions (17%).
Voluntary Standards & Initiatives
Smile is not a member / signatory by itself of any relevant initiatives, but its parent company the Co-operative Banking Group is a member of or signatory to the following relevant charter or initiatives:
- Opportunity Now and Race for Opportunity (The Co-operative Group)
- UKSIF (Co-operative Banking Group)
- The London Benchmarking Group (Co-operative Banking Group)
- Employer's Forum on Equality and Inclusion (Co-operative Group)
- Employers' Forum on Disability (Co-operative Group)
- Extractive Industries Transparency Initiative (Co-operative Insurance UK)
- ClimateWise (Co-operative Insurance)
- Carbon Disclosure Project Water Disclosure (Co-operative Financial Services)
Charitable Giving
The Co-operative Foundation is an independent charitable trust set up in 2000. The Foundation's current grant-making programme, Truth about Youth, aims to challenge and change negative perceptions about young people, by working with seven charities in cities around the UK. Has committed a total of £5 million since 2009.
Community Initiatives including Skills4Schools, Reading partners, StreetGames Young Volunteers, Offenders’ art exhibitions (invested £82,000), Supporting the homeless (donated £89,000).
Smile
- Current Accounts
- Savings
- Credit Cards
- Loans
- Mortgages
- Investments (through Co-operative Investments)
- Insurance (Car, Home, Pet, Life, Health, Business – through The Co-operative insurance).
- Student Current Account
Smile
smile (smile is a trading name of The Co-operative Bank and part of The Co-operative Group)
The Co-operative Bank plc.
P.O. Box 101,
1 Balloon Street,
Manchester
M60 4EP.
