The Warm Homes Loan Scheme is a government-backed loan for heat pumps, solar panels, home batteries and a few other low-carbon upgrades. It launched in late October 2026 with 10 lenders. You borrow from a bank or specialist lender, not from the government. The government pays the lender to cut your interest rate by up to 5 percentage points, and some deals are 0%.
It is open to homeowners and private landlords across the whole UK, with no income test. There are three catches that most coverage skips: it does not pay for insulation, landlords cannot borrow through a limited company, and the rate cut shrinks on long loans.
Last checked against GOV.UK, the government factsheet and the scheme rules (version 3, September 2026) on 28 October 2026.
Warm Homes Loan Scheme at a glance
| Key fact | Detail |
|---|---|
| What it is | Government-subsidised loans from approved lenders for low-carbon home upgrades |
| Launched | Late October 2026 (government factsheet 27 October; GOV.UK guidance live 28 October) |
| Where | Whole UK: England, Scotland, Wales and Northern Ireland |
| Who can borrow | Homeowners (with or without a mortgage) and private landlords borrowing in their own name |
| Income test | None set by the scheme. Lenders run their normal credit and affordability checks |
| Pays for | Heat pumps, solar PV, batteries, heat network connections, domestic wind and micro-hydro (biomass in rural homes, with a BUS grant) |
| Does not pay for | Insulation, windows, doors, roof repairs, gas or oil boilers |
| Interest | Up to 5 percentage points below the lender’s normal rate, never below 0% |
| Term | The subsidy applies to loans of 3 years or more. Some lenders offer up to 30 years |
| Installer | MCS-certified (any installer for heat network connections). No DIY |
| How to apply | Through a participating lender, an installer or retailer offering finance, or your mortgage provider |
| Combines with | Boiler Upgrade Scheme (England and Wales) or Home Energy Scotland grants |
Step 1 of 3
Check your EPC before you get quotes
Enter your postcode to see this property's current rating, expiry date and the measures its certificate recommends. Lenders may ask for an EPC, and it shows what to fix first.
Who can get a Warm Homes loan?
GOV.UK sets three basic conditions:
- you own the property, with or without a mortgage
- the property is in the UK
- it is residential, not commercial
The scheme rules for lenders add detail:
- Owner-occupiers and private landlords can borrow, on a personal basis.
- Limited companies and special purpose vehicles cannot. The rules say lending "to business or SPV type structures will not be allowed". If your rental is held in a company, this scheme is closed to you.
- Owners of several properties can take a loan for each property.
- There is no income threshold, no minimum EPC rating and no restriction by property type at scheme level.
- Lenders can add their own rules, and the scheme rules give "a requirement to evidence an Energy Performance Certificate" as an example.
Tenants cannot apply, because you must own the property. If you rent, the upgrade is your landlord's decision.
On a low income? GOV.UK suggests checking first whether you can get upgrades free through the Warm Homes: Local Grant (England) or other grants. Free beats cheap borrowing.
What the loan can pay for, and how much you can borrow
One loan can cover more than one upgrade. Each technology has its own cap:
| Upgrade | Maximum loan | Conditions |
|---|---|---|
| Solar PV panels | £15,000 | New roof-mounted panels, or adding panels to an existing system |
| Battery storage | £15,000 | Standalone or paired with solar |
| Air source (air-to-water) heat pump | £20,000 | Cap is measured before any BUS grant is deducted. Cannot replace an existing heat pump |
| Ground or water source heat pump | £35,000 | Cap is measured before any BUS grant. Shared ground loops included |
| Air-to-air heat pump | £10,000 | Not available yet. It can only be financed once an MCS installation standard exists |
| Biomass boiler | £20,000 | Rural homes only, and only alongside a BUS (or devolved) grant |
| Heat network connection | £7,500 | Any installer can fit it |
| Domestic wind turbine or micro-hydro | £20,000 | Domestic systems only |
The cap covers the installation and the work needed to make it run. For a heat pump that means items such as new radiators, pipework and a hot water cylinder. For solar it means scaffolding and the grid connection. An EV chargepoint can be included as part of a solar or battery job, but not on its own. The chargepoint installer must be OZEV-approved, and it cannot be one you have already had a chargepoint grant for.
What the scheme will not fund:
- insulation, including insulation done as part of a heat pump job
- windows and doors
- replacement roofing or structural work needed before solar goes on
- gas, oil or LPG boilers
Lenders may offer you a separate ordinary loan for excluded work, but it will be at their normal rate without the government subsidy.
Why this matters for your EPC rating
Heat pumps and solar panels can lift an EPC rating, but they are rarely the cheapest way to move up a band. In many homes, the first recommendations on the certificate are loft, cavity wall or floor insulation, and this loan does not cover any of them.
Before you borrow, check what your certificate recommends and what each measure costs. Our EPC improvement costs guide prices every common upgrade. The solar panels and EPC guide and heat pump cost guide cover how those two upgrades affect a rating.
How much cheaper is the interest?
The mechanism is simple. When your installation is verified, the government pays your lender a non-repayable grant of up to 20% of the loan. The lender must pass that on to you as a lower nominal interest rate. The scheme is designed to cut the rate by up to 5 percentage points below the lender's normal rate for the same product. The rate cannot go below 0%, so products that normally charge around 5% or less can reach 0%.
The government's own example is a £10,000 loan over seven years at a normal 8% rate, which costs about £156 a month. Through the scheme it could cost about £132 a month at 3%, saving around £285 a year.
The catch is the 20% cap. On short and medium loans it allows the full 5-point cut. On long loans, the same 20% buys a much smaller rate cut. We ran the scheme's published grant formula for a £10,000 loan where the lender's normal rate is 8%:
| Loan term | Best scheme rate | Monthly payment | Total interest (scheme) | Total interest (at 8%) |
|---|---|---|---|---|
| 5 years | 3.0% | £180 | £781 | £2,166 |
| 7 years | 3.0% | £132 | £1,099 | £3,092 |
| 10 years | 3.1% | £97 | £1,647 | £4,559 |
| 15 years | 4.5% | £76 | £3,761 | £7,202 |
| 20 years | 5.2% | £67 | £6,060 | £10,075 |
| 30 years | 5.8% | £59 | £11,132 | £16,416 |
EPC Advisor calculation using Appendix 6 of the Warm Homes Loan Scheme rules (September 2026), assuming the lender's normal rate is 8% and the full subsidy is passed on. Real products will differ.
Try your own numbers with our Warm Homes Loan calculator. It shows the best rate the grant allows for any amount, normal rate and term.
What the table shows:
- Up to about 10 years, the subsidy takes roughly 5 points off the rate.
- At 30 years, it takes off only about 2 points. The monthly payment is the lowest, but you would pay more than £11,000 in interest on £10,000 borrowed, about ten times the 7-year cost.
- Choose the shortest term you can comfortably afford.
When you compare products, look at:
- the APR (it includes fees, unlike the headline nominal rate) and the total amount repayable
- whether the loan is secured on your home: the rules allow first and second-charge mortgage products as well as unsecured loans and installer finance
- early repayment terms
- the cash price of the installation. A 0% deal is only good value if the installer's price is fair, so get at least one quote without finance.
Using it with the Boiler Upgrade Scheme
In England and Wales, the Boiler Upgrade Scheme (BUS) takes £7,500 off an air or ground source heat pump. Off-gas-grid homes on heating oil or LPG get £9,000 until 31 March 2027. BUS is not means-tested and your installer claims it. Since April 2026 it no longer needs a valid EPC.
The Warm Homes loan can then cover the rest. The scheme rules say the loan can fund "any costs of installation above the level of the BUS grant received". For example:
- heat pump quote: £12,000
- BUS grant: −£7,500
- borrow: £4,500, which is about £59 a month over 7 years at 3% (about £70 a month at 8%)
In Scotland, the loan can be combined with Home Energy Scotland grants in the same way.
Timing: installing a heat pump, solar panels or a battery is VAT-free until 31 March 2027. From 1 April 2027 VAT returns to 5%, which raises the price and the amount you would need to borrow. The £9,000 off-gas grant also ends on 31 March 2027.
You cannot use a Warm Homes loan and any other government funding for the same improvement. BUS and Home Energy Scotland are the only exceptions. A measure already funded by a council grant, for example, cannot also be financed with a scheme loan.
Lenders offering Warm Homes loans
GOV.UK lists 10 lenders at launch:
| Lender | What we know (from the government's launch factsheet) |
|---|---|
| HomeServe Finance | Partnering with E.ON |
| Hometree Finance | Solar and battery loans through installer partners |
| The Money Co-op | Not-for-profit co-operative |
| Propensio | — |
| Secure Trust Bank | Through retail partners on its V12 Retail Finance platform |
| Selina Finance | — |
| South Manchester Credit Union | For residents of central and south Manchester |
| Sunsave Energy | Low or zero-interest finance for solar and batteries |
| Tandem Bank | Through installer partners |
| This Bank | Retail finance through partners |
Some lenders only work with particular installers. Others let you use any MCS-certified installer. GOV.UK says to contact lenders directly about their products, rates, terms and eligibility.
More lenders are expected. The scheme rules plan a second lender application window in late 2026, with new lenders joining in early 2027, and yearly windows after that.
How to tell a genuine scheme loan: GOV.UK says the loan product will say if it is funded by the government through the Warm Homes Loan Scheme, and the scheme rules require approved lenders to use "Funded by UK Government" branding on these products.
How to apply
- Check your EPC and its recommendations. Lenders may ask for it, and it shows whether insulation should come first.
- Choose the upgrade. GOV.UK has free advice on improving your home's energy efficiency.
- Check grants first. Use BUS for a heat pump in England or Wales, Home Energy Scotland in Scotland, or the Warm Homes: Local Grant if you are on a low income in England.
- Get quotes from MCS-certified installers. For a scheme loan, a quote must be dated within the last six months, be addressed to you on headed paper, show the installer's MCS number and your full address, itemise the costs and state the system size.
- Compare loan products on APR, total repayable, term, fees and whether they are secured.
- Apply to a participating lender directly, through your installer or retailer, or through your mortgage provider. You will need to pass the lender's credit and affordability checks.
- Keep your paperwork: the quote, finance agreement, invoice, proof of purchase and MCS certificate.
After installation you may be randomly selected for an audit, either by an auditor working for the Department for Energy Security and Net Zero or as an MCS quality check. Being selected does not mean anything is wrong. You get at least 48 hours' notice of any visit.
Landlords: should you use it before 2030?
The scheme is open to private landlords who own property in their own name, with one loan per property. Company-owned portfolios are excluded.
It arrives while landlords plan for the proposed EPC C minimum for private rentals from 1 October 2030. That is government policy intention set out in January 2026. It is not yet law, and legislation is still to follow. Today's legal minimum is still EPC E. The proposals include a £10,000 cost cap per property and penalties of up to £30,000, up from the current £5,000 maximum. Both depend on that legislation.
Practical points:
- Start with the certificate. If your rental's EPC recommends insulation first, this loan will not pay for it.
- Heat pumps need a whole-house view. Pair a heat pump quote with a proper heat loss survey, and check the BUS grant first.
- Don't assume how loan-funded work will count toward the proposed £10,000 cap. That depends on the final regulations.
Our landlord EPC requirements guide covers the current rules and the 2030 proposals in full.
Scams, complaints and help
- You never apply to the government. Applications go through lenders, installers, retailers or mortgage providers. Be wary of anyone claiming to be "from the government" who is selling a Warm Homes loan.
- Report suspected fraud to Warm Homes Counter Fraud at [email protected].
- Problems with the loan: complain to the lender first, then the Financial Ombudsman Service.
- Problems with the installation: complain to the installer, then MCS.
- Scheme questions your lender or installer can't answer: [email protected].
How long will the scheme last?
It is planned as a multi-year programme. The January 2026 Warm Homes Plan set aside £2 billion for consumer loans, part of £15 billion for home upgrades to 2030.
The Budget on 28 October 2026 cut £1 billion of grant funding from the Warm Homes Plan. It also moved some money out of the Warm Homes Fund, which funds these loans, to pay for a new first-time buyer scheme. It announced no change to the loan scheme itself, which the Budget lists as part of the government's support for heat pumps and clean technology.
Scheme subsidy comes from one central pot, shared by all lenders on a first-come, first-served basis. Lenders get six months' warning when funding is running low and one month's notice before the subsidy stops. Under the rules, any change to eligibility gets at least 30 days' notice and does not apply to loans already made.
Not to be confused with
- Warm Home Discount: a winter discount on electricity bills for eligible low-income households. It is not a loan and not for upgrades.
- Warm Homes: Local Grant: free, council-delivered upgrades in England for lower-income households. Availability varies by council. See our Warm Homes: Local Grant guide.
- ECO4: supplier-funded insulation and heating for households on qualifying benefits, running until 31 December 2026. See ECO4 eligibility.
For every scheme in one place, see our UK energy grants update and the grants hub.
Sources
- GOV.UK: Warm Homes Loan Scheme guide (published 28 October 2026)
- Department for Energy Security and Net Zero: Warm Homes Loan Scheme factsheet (27 October 2026)
- Department for Energy Security and Net Zero: Warm Homes Loan Scheme rules, version 3 (September 2026)
- GOV.UK: Warm Homes Plan (January 2026, corrected March 2026)
- HM Treasury: Budget 2026 document (28 October 2026)
- GOV.UK: Apply for the Boiler Upgrade Scheme