Ecology launches UK’s first mortgage for modular homes

Written by Lori Campbell on 27th Jan 2023

Ecology Building Society, a Good With Money ‘Good Egg’ firm, has launched the UK’s first mortgage dedicated to modular homes.

Modular homes – made up of  pre-made ‘modules’ put together off-site – have a lower carbon footprint than average traditionally-built new homes because there are fewer lorry deliveries to the site. They are also usually more energy-efficient and produce substantially less waste.

Ecology is dedicated to building a greener society by providing mortgages for properties and projects that respect the environment and support sustainable communities, funded through its range of simple, transparent savings accounts.

The new mortgage comes with two interest rate options; 5.54 per cent for a loan with ‘arrears payments’ (Ecology’s current self-build rate is 5.79 per cent) and – in another first –  6.04 per cent for ‘advance payments’. An advance payment mortgage can help with design and build costs of a modular home’s components as it releases funds at the beginning of each stage rather than at the end.

The maximum mortgage term is 30 years. An application fee of £995, with an additional standard valuation fee applies.  

A Good Egg: Ecology Building Society

These mortgages can be paired with Ecology’s cashback option, which rewards eligible residential mortgage applications for projects that include the installation of a heat pump. This includes:

  • £500 cashback when borrowers install an air source heat pump  
  • £1,000 cashback when borrowers install a ground source heat pump  

Ecology chief executive Gareth Griffiths says: “Decarbonising our homes is key to meeting our net-zero ambitions.  

“The introduction of the ‘advanced payment’ mortgage option is an exciting first for Ecology, making energy efficient off-site build homes more accessible for those borrowers who may require up-front funding.  

“Our innovative approach, to secure our lending, in advance, on the modular panels while they are in the factory, has the potential to be a game-changer, helping to realise the environmental benefits of off-site construction, which will be critical in the fight against climate change.” 

Ecology’s new mortgage for modular homes comes after MP Richard Bacon’s independent review of custom and self-build housing in August 2021, which recommended supporting offsite manufacturing and modern methods of construction to deliver greener homes.

The lender says that off-site construction provides the opportunity to “quickly build high-quality and more energy-efficient homes with a lower carbon footprint and less construction waste”. 

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