Warm Homes Loan Scheme 2026: Heat Pump Finance
Looking to upgrade your home heating but worried about the upfront cost?
The new government-backed Warm Homes Loan Scheme could make installing a heat pump and other energy-saving technologies more affordable for homeowners across the UK.
With access to reduced-interest and, in some cases, interest-free finance, the scheme is designed to help more households improve their homes, reduce their reliance on fossil fuels and potentially lower their energy bills.
At Thermodynamics South Yorkshire, we're pleased to see more support becoming available for homeowners looking to make the switch to renewable heating. As an MCS-registered installer, we're here to help you understand your options and make the transition to a heat pump as straightforward as possible.
In this guide, we'll explain how the Warm Homes Loan Scheme works, which lenders are participating, how you can apply and how we can help with your heat pump installation.
What is the Warm Homes Loan Scheme?
The Warm Homes Loan Scheme is a new UK Government initiative designed to make energy-saving home improvements more affordable.
Launched in October 2026, the scheme works with participating finance providers to offer homeowners access to no- and low-interest loans for installing renewable energy technologies.
Rather than paying for the entire installation upfront, homeowners can spread the cost over an agreed repayment period, making improvements such as air source heat pumps, ground source heat pumps, solar panels and battery storage more accessible.
The government has worked with participating lenders to reduce interest rates by up to five percentage points compared with standard lending products.
Depending on the lender and finance product, some loans will also be interest-free, with repayment periods of up to 30 years available in certain cases.
The scheme is available to households throughout England, Scotland, Wales and Northern Ireland.
What can you use a Warm Homes Loan for?
The scheme supports a range of renewable energy and low-carbon technologies, including:
Air source heat pumps
Ground source heat pumps
Solar panel installations
Battery storage systems
Biomass boilers
Heat network connections
Other eligible micro-renewable technologies
There are maximum supported loan amounts for different technologies.
For homeowners considering a heat pump, the current limits are:
Technology | Maximum supported loan |
Air-to-water heat pump | £20,000 |
Ground source heat pump | £35,000 |
Air-to-air heat pump | £10,000* |
Air-to-air heat pumps are included once MCS certification is available for the relevant installations.
These are maximum supported amounts, not guaranteed loan offers. The amount available to you will depend on the lender, the project and its lending criteria.
Which Lenders are Offering Warm Homes Loans?
The government has initially announced ten participating lenders offering Warm Homes finance.
These are:
HomeServe Finance – partnering with E.ON.
Hometree Finance
Propensio
Secure Trust Bank
Selina Finance
South Manchester Credit Union
Sunsave Energy
Tandem Bank
The Money Co-Op
This Bank
Each lender will have its own finance products, interest rates, repayment periods and eligibility requirements.
You can find the latest participating lender information on the official government website:
How Does the Warm Homes Loan Scheme Work?
One of the biggest barriers to installing renewable heating has traditionally been the initial investment.
Although heat pumps can offer long-term benefits, the cost of purchasing and installing a system can be a significant expense for homeowners.
The Warm Homes Loan Scheme aims to tackle this by making finance more affordable.
Here's how the process generally works:
1. Arrange a heat pump quotation
The first step is to speak to an MCS-registered heat pump installer. They'll assess your property, discuss your heating requirements and provide a quotation for a suitable system.
2. Choose a participating lender
Once you have an installation quotation, you can explore the finance options available through the participating lenders.
Compare the interest rates, monthly repayments, loan duration and total amount repayable.
3. Apply for finance
You can apply directly to a participating lender, through an installer or retailer when arranging finance, or through your mortgage provider.
The lender will carry out its usual credit, affordability and eligibility checks before deciding whether to approve your application.
4. Arrange your installation
Once your finance has been approved and the arrangements are in place, you can proceed with your heat pump installation through an eligible MCS-certified installer.
5. Enjoy your new heating system
After installation, you'll have a modern, low-carbon heating system in place, with your finance repayments spread over the agreed period.
It's important to remember that some lenders work with specific installation partners, while others allow homeowners to choose their own MCS-certified installer. Always check this before proceeding.
Can I Combine the Warm Homes Loan with the Boiler Upgrade Scheme?
Yes! One of the particularly useful features of the new Warm Homes Loan Scheme is that it can be combined with other available financial support.
For homeowners in England and Wales, the Boiler Upgrade Scheme (BUS) can provide a grant of up to £7,500 or £9,000 towards an eligible heat pump installation.
In Scotland, homeowners may also be able to access support through Home Energy Scotland.
Combining an eligible grant with a Warm Homes Loan could help reduce the amount you need to borrow towards your new heating system.
For example, if your heat pump installation costs £15,000 and you qualify for a £9,000 grant, you could potentially use the grant towards the installation and finance the remaining £6,000 through an eligible loan.
This is an illustrative example rather than a guaranteed offer. Actual costs, grant eligibility and finance approval will vary.
It's also important to make sure that different funding schemes aren't being used to pay for the same part of the improvement twice.
Why is MCS Registration Important When Installing a Heat Pump?
When investing in a new heating system, choosing the right installer is just as important as choosing the right equipment.
The Warm Homes Loan Scheme requires eligible installations, including heat pumps, to be carried out by MCS-certified installers.
MCS stands for the Microgeneration Certification Scheme. It is the recognised quality and certification scheme for renewable energy installations in the UK.
Using an MCS-certified installer gives homeowners added confidence that their installation will meet recognised technical and consumer protection standards.
As an MCS-registered installer, we can help you with:
Assessing your property and heating requirements.
Recommending a suitable air source heat pump system.
Providing a detailed installation quotation.
Designing a system to suit your home.
Carrying out your heat pump installation to the relevant MCS standards.
Providing the necessary installation documentation and certification.
We believe that making the switch to renewable heating should be as simple and stress-free as possible. Our aim is to help you understand your options and find a heating solution that works for your property.
How Can Thermodynamics South Yorkshire Help Me Install a Heat Pump?
If you've been considering an air source heat pump but have been put off by the initial cost, the Warm Homes Loan Scheme could be an opportunity worth exploring.
We can help you take the first steps towards upgrading your heating.
Whether you're replacing an existing gas or oil boiler, building a more energy-efficient home or simply exploring renewable heating options, we'll be happy to discuss your requirements.
Our team can assess your property, recommend a suitable heat pump system and provide a quotation for the work.
As an MCS-registered installer, we can also help ensure your installation meets the relevant certification requirements for eligible funding schemes.
You can then use your quotation to explore the finance options available through the participating Warm Homes Loan lenders.
Ready to find out how much a heat pump installation could cost for your home?
Get in touch with our team today to arrange a consultation and take the first step towards a warmer, more energy-efficient home.
Frequently Asked Questions
Is the Warm Homes Loan Scheme available to everyone?
The scheme is available across England, Scotland, Wales and Northern Ireland. However, individual lenders have their own eligibility criteria, and all applicants must pass the relevant credit and affordability assessments.
Do I apply to the government for a Warm Homes Loan?
No. You apply directly to one of the participating lenders, through an installer or retailer offering the finance, or through your mortgage provider. You do not submit a loan application directly to the government.
Can I choose my own heat pump installer?
This depends on the lender. Some participating finance providers work with specific installer partners, while others allow you to choose your own MCS-certified installer.
It's always worth checking this before applying.
How much can I borrow towards a heat pump?
The maximum supported loan amount is currently £20,000 for an air-to-water heat pump and £35,000 for a ground source heat pump. The actual amount available will depend on your chosen lender and individual circumstances.
Can I get an interest-free Warm Homes Loan?
Some participating lenders are offering interest-free products, while others offer reduced-interest finance. The rates and repayment terms vary, so it's important to compare the available products.
Can I use the Warm Homes Loan Scheme with the Boiler Upgrade Scheme?
Yes. Eligible homeowners in England and Wales may be able to combine a Warm Homes Loan with a Boiler Upgrade Scheme grant of up to £9,000. The relevant Scottish grant and loan support may also be available in Scotland.
Does my heat pump need to be installed by an MCS-certified installer?
Yes. The scheme requires eligible heat pump installations to be completed by MCS-certified installers. This is why it's important to choose an appropriately certified installation company.
Take the Next Step Towards a More Energy-Efficient Home
The Warm Homes Loan Scheme is an exciting development for homeowners looking to invest in renewable heating.
By helping to reduce the cost of borrowing and allowing payments to be spread over time, it could make installing an air source heat pump a more achievable option for many households.
If you're thinking about making the switch, we'd love to help.
Contact Thermodynamics South Yorkshire today to discuss your heat pump installation and arrange a no-obligation quotation.
