Warm homes plan 2026: what it is and what it funds

In brief

The warm homes plan is the government umbrella; the Warm Homes Loan Scheme is the cheap loan inside it, backed by a grant of up to 20% of the loan that cuts your rate by up to around 5 percentage points.
It funds low-carbon measures, not insulation: solar and battery to £15,000 each, an air source heat pump to £20,000, a ground source heat pump to £35,000.
Public loans are expected from September 2026, and the loan stacks on top of the £7,500 Boiler Upgrade Scheme grant.

The warm homes plan 2026 is the government's umbrella name for its home energy upgrade programme in England, and the Warm Homes Loan Scheme is the borrowing route that sits inside it. It gives owner-occupiers and private landlords a cheaper loan for low-carbon upgrades: the government pays the lender a grant of up to 20% of the loan, which cuts the rate you pay by up to around 5 percentage points across a 3 to 10 year terms. It pays for heat pumps, solar, battery storage and rural biomass. It does not pay for insulation.

That last point trips a lot of people up, so it is worth being blunt about the shape of the thing before the detail.

The umbrella, the loan and the grant are three different things

Three names get used almost interchangeably online, and they should not be. The Warm Homes Plan is the policy umbrella. The Warm Homes Loan Scheme is a reduced-rate loan for people who can afford to borrow and want to spread the cost of a heat pump or solar. The Warm Homes: Local Grant is a separate, means-tested grant aimed at lower-income households, and that is the one that covers insulation.

If you are comparing routes, our guide to the Warm Homes Loan Scheme covers the loan in full, and the Warm Homes: Local Grant page covers the grant. This article is about the loan, because that is the part most homeowners and landlords will actually use.

What the loan funds, and the caps

Every funded measure carries its own loan cap. The heat pump caps are the generous ones, because a heat pump is the most expensive job the scheme is built to support.

Measure	Loan cap	Notes
Solar PV	£15,000	Panels and inverter
Battery storage	£15,000	Can be added to solar
Air source heat pump	£20,000	Includes radiators, pipework and tanks
Ground or water source heat pump	£35,000	Highest cap in the scheme
Biomass boiler	£20,000	Rural properties only

The heat pump caps cover more than the box on the wall. They include the ancillary works, the new radiators, pipework and hot water tank that a heat pump usually needs to run well, which is often where an install quietly overruns. There is more on that in our heat pumps guide, and you can size a monthly repayment on the heat pump calculator.

What it does not fund

Insulation is the big exclusion. So are structural works, and air-to-air heat pumps (the type that heats rooms but not your water) are named in the rules but not yet live. If insulation is your first priority, the loan is the wrong door, and the Local Grant is the right one.

One more thing to clear up. The Warm Home Discount is not part of this. That is a £150 rebate on your electricity bill for households on certain benefits, and it has nothing to do with a retrofit loan. If a bill rebate is what you were after, this is the wrong scheme, and a quick search for the Warm Home Discount will point you the right way.

How the money actually works

You do not apply to the government for the loan. You apply to an approved lender, and the government support is baked into the rate they can offer. The grant of up to 20% of the loan reduces the principal the lender has to charge interest on, which is how the headline rate drops by up to around 5 percentage points.

The loan also stacks. In England and Wales you can take the £7,500 Boiler Upgrade Scheme grant towards a heat pump first, then borrow the balance through the Warm Homes Loan at the reduced rate. Grant first, loan for the rest. For most households that combination is what makes a heat pump affordable rather than aspirational, and landlords weighing an EPC upgrade across a portfolio can use the same stack.

The timeline that matters

The lender application window opened in June 2026, which is why almost nothing you can borrow against exists yet. Public loans are expected from September 2026. And the old ECO4 scheme closes on 31 December 2026, which will push a lot of grant-seekers towards this vocabulary whether the loan suits them or not. Knowing which of these you actually qualify for saves a wasted application.

Common questions

Is the warm homes plan the same as the Warm Home Discount?

No. The Warm Home Discount is a £150 rebate on your electricity bill for people on low incomes. The warm homes plan is a home upgrade programme, and the Warm Homes Loan inside it funds five-figure low-carbon measures like heat pumps and solar. They share a word and nothing else.

When can I apply for a warm homes loan?

Lenders were onboarded first, in a window that opened in June 2026. Public loans are expected from September 2026, when you apply to an approved lender rather than to the government. A second lender cohort is expected to widen the choice in early 2027.

Does the warm homes plan cover insulation?

The Warm Homes Loan does not fund insulation. Insulation sits under the separate Warm Homes: Local Grant, which is a grant rather than a loan and is aimed at lower-income households. If insulation is your priority, that is the route to check first.

Can landlords use the warm homes plan?

Yes. Private landlords qualify for the Warm Homes Loan on a personal basis, alongside owner-occupiers, with no income threshold and no EPC minimum to enter. Lenders apply their normal affordability checks. Businesses and special purpose vehicles are excluded in the first phase.

If you are not sure which pot you fall into, start with the route, not the product. The funding wizard asks a handful of questions and points you at the loan, the Local Grant or the Boiler Upgrade Scheme, so you spend your one application on the door that opens.