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 can help you to deal with any issues arising quickly, without hassle and for free! As a first step we can help you write your complaint. Click the link below to create your email.
If you cannot resolve your issue you cannot raise your case to the Ombudsman until 8 weeks after you have first raised your complaint with your insurer, or you have received a ‘letter of deadlock’ from the company stating that they cannot resolve the issue as you have asked. Your complaint must also not be older than 9 months. For an accurate decision by the Ombudsman you should provide a detailed file of your communications and supporting documentation. In addition make sure you explain what you want as an outcome as this will help assess your case.
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