It will reward homebuyers who choose to buy energy efficient new build homes with lower interest rates on two and five-year fixed mortgages.
The Barclays Green Home Mortgage will be available to anyone who buys an A or B Energy Performance Certificate (EPC) Energy Efficiency Rated new build home from an initial group of five of the bank’s partner housebuilders.
It aims to join forces with all major UK housebuilders by the end of 2018.
The deal is open to people with a deposit as low as 10% and those on Help to Buy mortgages with a deposit of 25% or higher.
The bank expects households to save up to £750 on a typical mortgage of £150,000 over a fixed five-year period in addition to potential savings of £585 a year on a typical three-bed property as a result of reduced energy bills.
Energy and Clean Growth Minister Claire Perry welcomed the new product launch: “As well as the prospect of an exciting new energy efficient home for consumers, the launch of Barclays Green Home Mortgage, a major financial institution is exactly the kind of progress I want to see more of as we consider the recommendations of the government-commissioned Green Finance Taskforce.”