The new product will offer a preferential interest rate to new or existing customers who are purchasing an energy-efficient property.

The Green Mortgage, available from October 28th, will offer a discounted interest rate to customers purchasing a property with an Energy Efficiency Rating of A or B.

Every home must have an Energy Performance Certificate (EPC) when it is built, sold or rented – this gives the property an energy efficiency rating from A or 100 (most efficient) to G or 0 (least efficient) and is valid for 10 years.

Research recently undertaken by the bank found that 70% of NatWest Group customers are concerned about climate change but were unsure about how to reduce their carbon footprint.

The Green Mortgage supports the bank’s pledge to help customers become more energy efficient with an ambition that 50% of the bank’s mortgage book is at or above EPC C or equivalent rating of C by 2030. The new offering will be available at 60%, 75% and 85% LTV and will apply to residential homes as well as new builds.

The announcement also follows the recent launch of Royal Bank’s pilot partnership with fintech app, CoGo. The app provides the bank’s customers with access to a tracker to calculate their carbon footprint in real time based on their spending habits, while offering curated suggestions for how they can reduce their environmental impact with the option to offset emissions.

Miguel Sard, managing director of home buying and ownership at NatWest Group, said: “We want to help home buyers to make greener choices, particularly as properties make up 15% of the UK total climate emissions and one of the core parts of our purpose as a bank is to help address the climate challenge. Our customers are increasingly interested in purchasing energy efficient homes and by offering those customers a lower mortgage rate, we want to have a positive impact on the environment. This is just one of many ways Royal Bank is supporting and encouraging greener choices.”

Andrew Day, sustainability director at Telford Homes, added: “It is pleasing to see that Royal Bank’s corporate climate strategy is rewarding homeowners with a discounted green mortgage. This approach reciprocates well with increasing intergenerational customer demands for sustainable new homes, lower running costs and continuing to help make a positive contribution to the climate emergency.”