Finding an ethical mortgage
A mortgage is generally the single biggest investment for most people, and making an ethical choice is important.
2022 has been a stressful time for some homeowners, with mortgage interest rates the highest they have been since the 2008 financial crisis, but mortgages keep ticking, people keep buying houses and banks keep benefiting.
By the end of a 25-year term, a borrower will commonly have paid 1.3 - 1.9 times more back on the amount they were lent at the beginning. Unfortunately, the lenders' profits often end up invested in particularly problematic industries, such as fossil fuels, arms or unsustainable agriculture.
In this guide we look at how to choose an ethical mortgage and why building societies are usually a better choice compared to banks. We also explore whether mortgage lenders could do more to help address issues such as the urgent need to improve the poor energy efficiency performance of many UK houses.
Ethical mortgage lenders
According to the Building Societies Association, building societies currently hold around a quarter of the total mortgage market share.
We hope to see an upward trend in this because, as a quick look at our scores table clearly shows, building societies consistently outperform most of the banks when it comes to ethics, with all of the building societies scoring higher than any of the mainstream banks, bar The Co-operative Bank.
There is a world of difference between the ethics of lenders appearing in the top and the bottom thirds of our scoring table.
The good news is that a quick search on a comparison website shows that several building societies – including some of our Best Buys – also offer the most competitive mortgage rates.