The Ethical Investment Co-operative (EIC) has joined forces with a panel of building societies to offer borrowers an ethical mortgage service, writes Rachel Williams.
With EIC positioned as a co-ordinating broker, borrowers will be able to select mortgages through a range of ethically-screened lenders. The panel so far includes the Skipton, Scottish and Yorkshire building societies, but could be expanded over time.
Ian Harland, director of EIC, said: “We made a selection of mutual lenders with a good cross-section of products on the market and looked at their commitment to mutuality, product lines, cost and how they charge interest. Most mutuals qualify by default as acceptable to ethical investors.”
EIC also offers guidance for borrowers wanting to take an interest-only mortgage and would like their repayments invested in an ethical savings vehicle such as a pension or ISA.
The service includes a ‘quality of life’ survey of the property which advises the borrower on a range of cost-effective improvements to reduce energy and water costs, helping borrowers reduce the cost of running the home and, in some cases, the cost of the mortgage.
“Subject to improvements being made that relate to the report, borrowers may be able to get additional discounts on their mortgage rate,” said Harland.
Harland is confident ethical mortgages should develop a similar profile to ethical investment.
He said: “With the test of time and the right promotion, ethical mortgages could account for 1% of the mortgage market.”