The expected financial savings must be equal to or greater than the costs attached to the energy bill, known as “the golden rule” .There has also been doubts cast over whether the central tenet of the scheme - a so-called "Golden Rule" whereby the cost of repayments never outweighs the savings on the bill - will actually be successfully implemented.
The scheme requires an assessment of £150 or more to determine what if any work can be done. The cost of this has been suggested to deter many people. The Government believes Green Deal loans will be repaid at a rate no more than 6.92%.
Further to these charges there will be an initial set up charge followed by a £20 annual fee, failure to repay a Green Deal will lead to disconnection of gas and electricity supplies. Recent surveys have found little awareness among the general public for the Green Deal. The high interest rates and charges of the scheme have been heavily critised.
If the loan is paid off early the entire interest for 25 years is the penalty to pay,this would arise due to the anticipated difficulty in trying to sell your home because any buyers would be put off by the increased fuel bills.
It is not yet entirely clear what kind of legal entity is applied to the Land Registry documentation to properties that have received Green Deal loans, or how the mortgage providers will treat those properties when the property is resold or remortgaged.
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