Based on resolver’s experience to date, interest rates on loans obtained from banks, building societies, or advances on your mortgage are normally variable – and can fluctuate over time.
On the other hand, Green Deal loan interest rates are fixed rather than variable. However, Green Deal Providers are allowed to increase the whole charge (the installments that you pay) by two per cent each year. If a Provider chooses to do this the level of the increase and the installments payable must be agreed and fixed from the outset.
The way the Green Deal differs from a standard loan is that you should not pay back more in loan repayments than you are saving on your energy bill. This system is known as the 'Golden Rule' - but the Golden Rule is not a guarantee, just a guideline based on energy-saving estimates. You'll therefore only make overall savings on your energy bill once you've made all your repayments. A Green Deal Provider must inform customers that: (a) savings estimates in the Green Deal Advice Report are not necessarily the exact savings which will be made on energy bills; and (b) whether these savings are actually achieved will be affected by: (i) the way that energy is used at the property; and (ii) the tariffs charged for energy supplied to the property.
If you feel the interest rate is too high, whether on a standard or Green Deal loan, you should write a formal letter of complaint to the respective company. If they are unable to resolve your issue then you will be able to escalate, as a last resort, to the Ombudsman. They will act as an independent arbitrator to rule on any dispute between you and your provider.
Resolver recommends that you submit your concern in writing and we can assist you in all aspects of your complaint; formulating letters, recording dialogues, and reminding you when and who to escalate to Ombudsman
Remember that this is a good time to check that you are on the best energy tariff for your needs using a price comparison website, so it’s a good idea to take some time to compare prices and switch providers if you find a better deal. As you are moving into a new home you may not have the full details for the energy use in the home so resolver recommends you ask the current owner/occupier for the energy usage via your solicitor or the estate agent.
Price comparison websites often have tools that help you estimate your energy usage and to help you make an informed decision.
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