How Does an EPC Rating Affect My Mortgage?

04 July 2022

As sustainability begins to play more of an important role in today’s housing sector, EPC ratings are emerging further to the forefront of concerns for buyers and sellers. And for good reason – your property’s EPC rating is a crucial factor in whether your property will sell. 

An EPC (Energy Performance Certificate Rating) measures your property’s energy efficiency. It’s measured from A to G with ‘A’ being the most efficient and ‘G’ being the least. Overall, the higher the rating, the less the property costs to heat and power.

A poor EPC rating implies poor efficiency, which means the property may cost more to run and have more of a detrimental impact on the environment compared to properties that have a good EPC rating. 

An EPC can also measure a property’s carbon dioxide emissions, and in today’s current climate, this can be a big deciding factor for many buyers who don’t want their carbon footprint to become the size of a house. 

An energy efficient property means a cost-efficient property, and a home with low efficiency will struggle to compete in today’s market. 

For those who are looking to buy a property to live in, it’s important to note that mortgage companies will certainly lend on properties with low EPC ratings. 

Although, it is likely that they will recommend potential improvements which could be made to bring the property to a minimum ‘E’ rating, and any improvements needed will be reflected in the property’s valuation.

As a buyer, make sure you are aware of the property’s rating before putting your offer in.

If you are in the buy to let category, and have a low EPC rating such as ‘F’ or ‘G’ then your mortgage application is set up for potential failure. Under current government proposals, by 2035, all homes will have to obtain an EPC rating of C or better. 

This could make getting a mortgage deal harder and more expensive.

How can I improve my home’s EPC rating?

If your EPC rating is just in the margins, then it will be quite easy to raise it by one or two ratings. Switching to LED light bulbs – which are much more energy-efficient and eco-friendly, could make all the difference. You could also try wall and roof insulation, double glazed windows, and installing smart meters and energy efficient boilers.