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
Tesco Personal Finance
Green/Ethical Products
None
Ethical Lending or Insurance
No evidence of an ethical lending policy was found.
Responsible Lending
1. Credit Lending
Tesco Personal Finance offers unsecured credit only.
The bank runs both credit checking (with reference agencies) and scoring (using information provided by the customer).
No information was found on any policy to avoid or prevent offering unrequested increases in credit limits to customers.
2. Debt Warning
The bank warns customers to spend what they can afford and about having to pay monthly interest. It recommends using a credit card as a ‘budgeting tool’, rather than as a loan or as an overdraft, and not to use the card's spending limit as a benchmark. It further warns of potential damage to customers’ credit ratings by not making minimum credit card payments.
The bank’s website contains a link to the FSA’s Money Made Clear site (which includes a Debt Test) and also has a quick quiz to test if customers are using their credit cards responsibly.
The bank’s website also carries a section on bankruptcy and warns against using it as a way of clearing debt.
3. Debt Management and Advice
Apart from the section on bankruptcy, no other information or policies on payment default and handling payment problems were found. The bank does offer the possibility of a two month payment holiday, but specific details were not publicly available.
Financial Exclusion
Tesco Personal Finance does not provide a basic bank account or other service to the financially excluded, nor does it meet any of our other criteria i.e. it was not found to work with credit unions, provide access for disabled or other disadvantaged customers, fund microfinance projects or lend at preferential rates to deprived communities.
Environment
Tesco’s environmental policy addresses the key issues of energy efficiency, waste management and states it has a long term commitment to improved environmental performance.
Carbon Neutral
No appropriate pledge was found to make the bank’s business operations carbon neutral.
Equal Opportunities
Tesco’s diversity policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
No data found.
Voluntary Standards & Initiatives
Not by itself, but the parent company is member of:
Tesco Personal Finance
- Credit Cards
- Loans
- Mortgages
- Savings
- Insurance (Home, Motor, Travel, Pet, Life, Health)
Tesco Personal Finance
Tesco Personal Finance
PO Box 104010
George House (4th Floor)
36 North Hanover Street
Glasgow
G1 2YG
