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New Mortgage Plan Introduced for ‘Zero Energy Bill’ Homes

Octopus Energy and Perenna have launched a home mortgage system with no borrowing costs, a deal that allows owners to become “debt-free” without having to pay back a substantial amount.

An inventive collaboration between Octopus Energy and the bond bank Perenna has brought about the extraordinary Zero Bills home mortgage. This new product of tomorrow’s housing market provides a once-in-a-lifetime opportunity for homeowners to enjoy the benefits of living in cutting-edge homes powered by green energy—homes that don’t saddle their owners with energy costs for at least a decade.

The “Zero Bills” concept started as a way to bring cheap energy deals to a wider audience. It supports potential homeowners who want to live sustainably—offering environmentally friendly technology to fix into newly built homes to increase their energy efficiency and do so without massively increasing the cost of the total construction.

Ways in Which the Zero Bills Mortgage Increases Accessibility

Perenna’s mortgage affordability calculations naturally contain the innovative additions of Octopus Energy. These two companies have formed a partnership and have pooled their evaluation criteria to yield a “Greener Borrowing Discount.” Over 80% of homebuyers in the UK are paying more than they need to for their mortgage due to the arcane way the industry employs variables to determine monthly housing costs. Perenna, in partnership with Octopus Energy, is challenging this outdated norm and replacing it with a new way to evaluate a homebuyer’s “ability to pay.”

The idea behind the homes with Zero Bills is that their reduced interest rate lessens the often sizeable initial financial burden of purchasing a home. That large first down payment and the prospect of the 30-year commitment to pay off the mortgage—these are very real and very immediate reasons that prevent many of us from even considering buying a home. These homes also reduce the main reason for not buying or otherwise investing in any alternative to our current energy-system dead end—usually that there is no payback to using alternative energy that recoups the financial loss to whatever the magic number of dollars is compared to living the way we used to: the old price of free.

The range of buildings that consume no energy and make no yearly payments to the utility company encompasses both residential and commercial applications. These structures are aptly called “zero bills homes” since they exist on zero net energy, which means they only use a net amount of renewable energy that is equal to the amount of energy they produce.

Octopus Energy is making big waves in the real estate and energy sectors. We have built a portfolio of more than 1,000 homes across the UK that fulfill our green standards and are NABERS certified. These homes represent various ownership types, including private purchase, shared ownership, affordable buying options, and social rent.

Octopus Energy and Perenna are leading a global drive to establish 50,000 energy-efficient “Zero Bills” homes by the close of 2025. These homes aim to be some of the most affordable on the market, due in part to the energy savings they deliver. The mortgage on a Zero Bills home is specially tailored to make it simpler for you to invest in plants suited to your palate.

Advantages for Industry and Consumers

Michael Cottrell, Director of Octopus Energy’s Zero Bills Homes, said the following about the launch: “Our Zero Bills homes promise to provide ten years of energy without any bills. We’re very pleased that Perenna is the first bank to acknowledge the value of these energy-efficient homes by offering a reduced interest rate on their mortgages. This act on Perenna’s part of rewarding Zero Bills customers means that the endorsement of green technology is coming from both an energy provider making the promise of lower energy bills and from a bank making the promise of a lower mortgage rate if an energy-efficient home is chosen.”

Arjan Verbeek, Co-founder and CEO at Perenna, has a similar perspective to call upon: “Taking decarbonization to the homes of the UK is a huge problem and demands teamwork.” You get the sense that there is a kind of “all-hands-on-deck” pull between the energy and financial sectors, which makes for an exciting (and one should add, very necessary) prospect.

What is a Zero Bills home?

A Zero Bills home is a property equipped with green energy technologies, such as solar panels and heat pumps, which are designed to eliminate the homeowner’s energy bills for a specified period, typically ten years.

How does the Zero Bills mortgage work?

The Zero Bills mortgage, offered by Perenna in collaboration with Octopus Energy, incorporates energy efficiency into the home affordability calculation which allows for a lower interest rate and, subsequently, lower monthly payments compared to standard mortgage offerings.

Are there additional benefits to choosing a Zero Bills home?

Beyond the absence of energy bills, homeowners of Zero Bills properties often benefit from increased property value due to the integrated sustainable technologies. Additionally, these homes contribute significantly to environmental conservation efforts by reducing the overall carbon emissions associated with traditional home energy use.

Can existing homeowners switch to a Zero Bills mortgage?

Currently, the Zero Bills mortgage scheme is primarily available for new home purchases that meet specific green energy criteria set by Octopus Energy and Perenna. It is advisable for existing homeowners interested in transitioning to a green mortgage to consult directly with Perenna or a financial advisor for tailored advice.

The collaboration between Octopus Energy and Perenna highlights a significant stride toward innovative home financing solutions that prioritize environmental sustainability. By promoting the adoption of green technologies in residential properties, they not only enhance homeowner savings but also contribute robustly to the broader agenda of decarbonizing urban living spaces.