Octopus Energy and Santander have launched what they describe as the UK’s first mortgage from a high-street bank designed specifically for Octopus Zero Bills homes, a move that could reshape how lenders assess the affordability of energy-efficient properties. The new product is available on selected newbuild homes eligible for a guaranteed 10 years of no home energy bills under Octopus Energy’s world-first Zero Bills tariff. Because Zero Bills homeowners are guaranteed not to pay a penny for their home energy, eligible buyers could borrow up to £30k more than they would for a similar property with typical running costs. The launch arrives as demand for heat pumps, solar panels and battery storage climbs sharply across the UK housing market.
A Mortgage Built Around Zero Bills
Santander’s Zero Bills mortgage is built to recognise that homeowners in these properties carry lower monthly outgoings from the moment they move in. Rather than applying a standard affordability assessment, the bank factors in the guaranteed absence of home energy costs, opening up additional borrowing headroom for buyers of eligible newbuilds. Launched in 2022, Octopus’ Zero Bills scheme puts customers into homes fitted with a heat pump, battery and solar panels, with no home energy bills for at least five to ten years, guaranteed.
Nigel Banks, Zero Bills Director, Octopus Energy, said:
“Not all homes cost the same to live in, so they shouldn’t all be treated the same when it comes to mortgages. Zero Bills homes come with guaranteed no home energy bills, giving homeowners lower monthly outgoings from day one.”
“This mortgage with Santander recognises that lower cost of living, helping more buyers access cleaner, smarter homes and brings the benefits of Zero Bills living to even more people.”
Santander’s Approach To Affordability
For Santander, the product marks a shift in how mortgage affordability calculations can reflect the realities of energy-efficient housing. By taking into account the ten-year Zero Bills guarantee, the bank says it can offer greater flexibility in borrowing amounts for customers purchasing an eligible home, such as those buying a five-bedroom family home who could access up to £30,000 more compared with Santander’s standard affordability assessment.
Ben Merritt, Head of Mortgages, Santander UK, said:
“As the first major bank to recognise the benefits of Octopus Energy’s Zero Bills homes within our affordability assessment, we’re helping customers make the most of lower household outgoings when buying an eligible newbuild home.”
“By taking into account the 10-year Zero Bills guarantee from Octopus, this provides greater flexibility in the amount some customers are able to borrow, helping more people access homes that are designed to be energy efficient and more affordable to run.”
“This partnership is another example of how we’re evolving our mortgage offering to reflect the changing needs of homeowners and support customers who are buying energy efficient homes.”
Rising Demand For Green Tech Homes
The announcement follows the introduction of the Future Homes Standard, which requires new homes to include technologies such as heat pumps and solar panels, accelerating the shift towards housing that is cleaner and cheaper to run. Octopus Energy data shows the appetite for these technologies climbing quickly, with heat pump sales up 103%, solar panel sales up 78%, and EV charger enquiries up 42%, as households look to insulate themselves from energy market volatility.
Santander’s Tomorrow’s Homes research reinforces the trend, finding that more than half of UK adults, 52%, believe improving their home’s energy efficiency would have a significant impact on their lives, while eight in 10 point to reducing energy bills as their main motivation for making home improvements.
Backing From The Green Finance Institute
The launch has also drawn support from the Green Finance Institute, which sees enhanced affordability assessments as a route to unlocking wider investment in home upgrades across the UK mortgage market.
Ryan Jude, Programme Director, Green Finance Institute, said:
“The £242 billion flowing through the UK mortgage market each year is one of the most powerful levers we have to help households upgrade to warmer, more efficient homes. Santander’s enhanced affordability offer opens the door for more people to invest and upgrade with confidence, building momentum behind a more innovative mortgage market.”
“The GFI has long supported the role of enhanced affordability in the green mortgage market to support homeowners with low or no energy bills to be able to borrow more, and we are delighted to see Santander put this concept into practice.”
Scaling Zero Bills Across Markets
Octopus has so far approved over 6,000 Zero Bills homes through partnerships with developers including Vistry, Thakeham, Wates and gs8, spanning affordable and private rent alongside private and shared ownership properties. The company aims to deliver 100,000 Zero Bills homes by 2030, and has already extended the model beyond the UK to Germany, France and New Zealand. With Santander now recognising the financial benefits of these homes within its lending criteria, the partnership signals a broader recalibration of how energy performance can translate into real borrowing power for buyers seeking homes that are cheaper to run from the outset.
