The Warm Homes Loan Scheme, explained
Last reviewed: 20 July 2026
The Warm Homes Loan Scheme is a government-backed lending scheme, expected to open to the public in September 2026. It lets owner-occupiers and private landlords borrow for a heat pump, solar, a battery or rural biomass at a rate up to 5 points below a normal loan, with a grant of up to 20% of the loan set against the balance.
What you can borrow, and the cap on each measure
The loan is measure-specific. Each low-carbon improvement has its own cap. The caps below are the maximum loan before any grant is taken off. If your quote comes in higher, you fund the difference yourself.
| Measure | Loan cap | Notes |
|---|---|---|
| Air source heat pump | £20,000 | Before the £7,500 Boiler Upgrade Scheme grant. Covers radiators and pipework. |
| Ground source heat pump | £35,000 | Includes water source. Before the grant. |
| Solar panels | £15,000 | 0% VAT on solar until 31 March 2027. |
| Battery storage | £15,000 | Can be financed with or without solar. |
| Biomass boiler | £20,000 | Rural homes only, without a mains gas connection. |
An air-to-air heat pump cap is named in the scheme rules but is not yet an eligible measure, so we leave it out of our tools until it is confirmed.
How the rate and the grant work
Two things bring the cost down. First, the interest rate is reduced by up to 5 percentage points against a normal unsecured loan. Second, a grant worth up to 20% of the loan is paid straight against what you owe, reducing the balance rather than landing in your account.
Terms run from 3 to 10 years. The exact rate you are offered is set by the lender after their own affordability checks. This site does not set rates, arrange the loan or recommend a lender.
A heat pump often needs larger radiators, new pipework and a hot water cylinder. Many cost comparisons ignore these. The Warm Homes Loan can cover them within the heat pump loan, which is why a realistic all-in figure matters. Our heat pump calculator includes them.
Who can use it
The loan is open to owner-occupiers and to private landlords borrowing in their own name. It is not for business borrowers or leasing arrangements. You can read the detail on our eligibility page.
What it does not cover
The loan does not fund insulation, structural works or general home improvements. Insulation is usually the most cost-effective first step, so if you need it, check whether you qualify for the fully funded Warm Homes: Local Grant before borrowing for anything else.
Stacking with the Boiler Upgrade Scheme
The loan is designed to sit on top of grants, not replace them. For a heat pump in England or Wales you can take the £7,500 Boiler Upgrade Scheme grant now, then borrow the balance through the loan once it opens. The grant comes off first, and you borrow what is left.
Common questions
When does the Warm Homes Loan Scheme launch?
Public applications are expected to open in September 2026. Lenders were confirmed earlier in 2026. We re-check the date as launch approaches. See our launch date page.
Can landlords use the loan?
Yes. Private landlords borrowing in their own name are eligible. Our landlord guide covers this alongside minimum EPC standards.
Does the loan cover insulation?
No. Insulation is not an eligible measure. If you need it, check the fully funded Warm Homes: Local Grant first.
Can I get the Boiler Upgrade Scheme grant as well?
Yes, for a heat pump in England or Wales. The £7,500 grant comes off first and you borrow the balance.
Sources
- DESNZ Warm Homes Loan Scheme Scheme Rules, June 2026, via GOV.UK
- GOV.UK Boiler Upgrade Scheme guidance
- GOV.UK Warm Homes Plan, January 2026
Last reviewed: 20 July 2026
Know the day the loans go live
The Warm Homes Loan Scheme is expected to open to the public in September 2026. Join the list and we will email you when lenders open, with occasional funding updates in between.