When it comes to being responsible, who you borrow from is as important as who you pay money to. In the course of our lives, a mortgage is likely to be our single biggest borrowing.
Most conventional banks invest in controversial activities such as weapons, cluster munitions, fossil fuels and deforestation, meaning your mortgage and interest payments could be funding these harmful industries.
Rising interest rates have meant that finding an affordable mortgage is a difficult task, but there are ethical lenders offering competitive deals.
They cover everyone from mainstream borrowers to those struggling to get on the property ladder or those wanting to build something more interesting. And if you are buying or building an eco-friendly home or plan to make green home improvements, you could be find a discounted rate.
Here are six Good picks.
Ecology Building Society
Standard variable rate (renovation) of 6.04 per cent
Standard variable rate (residential self-build) of 6.29 per cent
If you’re borrowing for a project that is a little different, Ecology Building Society (a Good With Money ‘Good Egg’ firm) specialises in properties outside the mainstream. These include self-build mortgages for non-standard but energy-efficient construction, energy-efficient renovations, moorings for houseboats and loans for buying woodland.
With a standard variable rate from 6.04 per cent for renovations and 6.29 per cent for self builds, Ecology won’t compare with the very cheapest rates on the market. But mortgages for non-standard properties are typically more expensive than the norm. The good thing is, once your property is complete, the rate is typically discounted according to the energy savings you are making.
So if you’re building a wattle and daub house or want to make a listed building more energy efficient, Ecology will consider your project without taking what it calls a ‘tick box’ approach.
The mortgages are funded through members’ savings accounts.
Good For: Selfbuilders, energy improvers, homes that promote sustainable living
A Good Egg: Ecology Building Society
Coventry Building Society
Remortgaging: Fixed rate to 31.10.29 at 4.53 per cent with a 35 per cent deposit (£999 product fee) or 4.63 per cent with a 25 per cent deposit (£999 product fee)
First-time buyers: Fixed rate to 31.10.29 at 4.53 per cent with a 35 per cent deposit (£999 product fee) or 4.63 per cent with a 25 per cent deposit (£999 product fee)
Coventry Building Society is currently the only building society to have achieved B Corp status. B Corp is a globally recognised certification for companies that meet high standards of social and environmental performance, accountability, and transparency, and are run for the benefit of all people, communities, and the planet.
Its rates are competitive too.
Good for: Those remortgaging or first-time buyers with a decent deposit
Suffolk Building Society
Remortgaging and first-time buyers: Two-year fixed rate at 5.19 per cent with a 20 per cent deposit (£199 application fee/ £999 completion fee)
Remortgaging and first-time buyers: Three-year fixed rate at 5.09 per cent with a 20 per cent deposit (£199 application fee/ £500 completion fee
Building societies are mutuals, which means they don’t need to make a profit for shareholders. They are owned by their customers, who have a vote in their decision making. This business model fundamentally makes building societies a more ethical option than banks (not including ethical banks such as Triodos and Charity Bank).
Smaller building societies are traditionally more able to look at customers on an individual basis, and Suffolk is proud of its roots in the community. As well as promising to consider each customer individually, it works with housing organisations across Suffolk to help address more systemic homelessness issues. The group also has a focus on financial education in schools.
Suffolk is one of the few providers to offer competitive mortgage rates for house purchases with a 10 per cent deposit
Good for: First-time buyers with smaller deposits
Nationwide Building Society
Remortgaging: Two-year fixed rate at 4.84 per cent for those with 30 per cent deposit (£999 fee) or two-year fixed rate at 5.44 per cent for those with 30 per cent deposit (£999 fee)
First time buyers: Two-year fixed rate at 4.69 per cent for those with 30 per cent deposit (£999 fee) or two-year base rate tracker at 5.55 per cent for those with 30 per cent deposit (£999 fee)
Britain’s biggest mutual uses its size to offer good value products for more standard borrowers, particularly those with a decent amount of equity in their homes.
For those who do have equity or a decent deposit to put down on a first home, Nationwide’s rates are competitive.
Nationwide’s ‘Green Additional Borrowing’ scheme offers a lower initial interest rate if at least 50 per cent of the loan is used to make your home more sustainable. This includes the following measures: “air source heat pump, cavity wall insulation, double glazing/replacement windows, electric car charging point, ground source heat pumps, loft insulation, small scale wind turbine, tanks and pipes insulation.”
Good for: Borrowers with lots of equity in their homes/ first-time buyers with at least 30 per cent deposit
Co-operative Bank
New mortgage customers: Two-year fixed rate at 5.05 per cent with 30 per cent deposit (£1249 fee) or 5.07 per cent (£749 fee)
Despite its highly publicised woes in recent years and hedge fund ownership, the Co-op continues to reiterate that it is an ethical bank. It is currently in talks with Coventry Building Society over a proposed merger.
Co-op Bank donates £5 to youth homelessness charity Centrepoint for every mortgage taken out.
Existing customers of the Co-op can apply for one of its Green Additional Borrowing products to help make improvements to their home that will reduce energy consumption and help tackle the climate crisis.
Good for: Borrowers looking to remortgage
Habito
If the mortgage market feels a bit overwhelming, Habito is an online mortgage broker that promises to take care of the entire mortgage process for you. Habito is a B-Corp company, which means it is legally committed to putting people and planet on the same level as profit. The online platform can search more than 90 lenders and 20,000 products in just a few seconds to find the right product for you.
Using Habito as a broker to find your best mortgage deal, and apply for it on your behalf, is completely free.
It also offers a ‘Habito Plus’ service where it will handle all your buying admin, including price negotiation, an in-depth property survey, conveyancing and legal work, for a fixed fee that starts at £2,000.
Good for: People wanting some expert help with finding a mortgage
If you want to have a savings account, insurance policy, investment fund or mortgage from companies that do the right thing, check out our Good Eggs.
These are companies that have passed strict (independent) criteria to prove they make a positive impact – to the planet, society, and you.
Good With Money occasionally uses affiliate links to providers or offers, where relevant. This means that if you open an account or buy a service after following the link, Good With Money is paid a small referral fee. We choose our affiliates carefully and in line with the overall mission of the site.
