TAB Launches New Commercial Mortgage Product That Rewards Borrowers Who Fulfil ESG Criteria
In September 2023 real estate finance house TAB, which expected a £500m loan book in 2024, launched its first commercial mortgage, with exit-fee discounts for borrowers who meet environmental and social criteria.
The interest-only loans run from £250,000 to £2.5m over three to ten years, with loan-to-value up to 65%. The exit fee is 2.5%, and up to 1.25 percentage points can be earned off it. Improving a property's EPC rating can earn up to 0.75 points (0.25 for D to C, 0.5 for D to B, 0.75 for D to A); sustainability measures such as EV charging, efficient waste management or green materials can earn another 0.25; and a further 0.25 is available for social outcomes linked to the UN Sustainable Development Goals, for instance leasing to charities, social enterprises or adult learning. TAB works with borrowers to assess evidence.
Founder and chief executive Duncan Kreeger called the product a natural next step, combining tailored commercial mortgages with bridging-style speed, and said it was meant to encourage improvements that future-proof buildings.
