Warm Home Loans scheme launches across the UK

The Department for Energy Security and Net Zero launched the Warm Homes Loan Scheme on Tuesday 27 October 2026, offering interest-free and low-interest loans for heat pumps, solar panels and batteries with no upfront cost¹. The scheme is open to households across England, Scotland, Wales and Northern Ireland¹, and ten lenders are taking part initially, with repayment terms of up to 30 years in some cases¹.

The maximum loan supported varies by technology. The government says it has worked with lenders to deliver an up-to-5 per cent reduction in interest rates compared with regular bank loans¹, and i understands most larger lenders will offer rates of around 2 to 4 per cent⁴. The government's worked example is a homeowner borrowing £10,000 at 8 per cent over seven years, repaying around £155 a month on a loan available now, and saving up to £285 a year on repayments through the scheme¹.

All installations except heat network connections must be carried out by MCS-certified installers¹. Loans can be combined with a grant of up to £9,000 through the Boiler Upgrade Scheme, or Home Energy Scotland in Scotland¹. The government estimates that installing a heat pump, battery and solar panels could save a household up to £550 a year on energy bills, rising by a further £300 a year with a time-of-use tariff¹.

"The no- and low-interest loans will allow people to install clean energy technology without any upfront cost, instead spreading payments over many years."

The scheme's launch came a day before Chancellor John Healey's first Budget⁵. Which? reported that the Budget included further details of the scheme and that £1bn will be cut from the Warm Homes Plan, of which the Boiler Upgrade Scheme is part³. The Guardian reported that hundreds of millions of pounds will be cut from the Boiler Upgrade Scheme's £2.7bn five-year budget, though the scheme is not expected to be scrapped⁵. The government has not reported final interest rates for each lender, and the full cost of the scheme to the Treasury has not been reported beyond Which?'s figure of £2.6bn³.

Why it matters for households

The upfront cost of a heat pump, battery or solar array has been the main barrier for many homes, and the scheme spreads that cost over years rather than requiring it in one payment¹. For a household wanting to generate and store its own electricity, the loan caps allow solar and a battery to be financed together, up to £15,000 each¹. Combining a loan with a Boiler Upgrade Scheme grant reduces the amount borrowed for a heat pump¹. The Energy Secretary, Miatta Fahnbulleh, said the loans would help families "upgrade their homes with no upfront costs to make them warmer and cheaper to run"¹. Lenders will carry out normal affordability, credit and eligibility checks, so a loan is not automatic¹. More on how these products fit together is in our guide to solar, a battery or a heat pump, and on grants and household energy independence.

What happens next

The government says further lenders and products are expected to join the scheme as it develops¹. The Budget also set out a one-off £100 payment for households in Council Tax bands A-D, with local authorities instructed to make payments starting in January 2027³, and the removal of gas standing charges in 2027 "or as soon as possible after"³.

Sources6 sources

1. Warm Homes Loan Scheme: Factsheet   - GOV.UK, gov.uk
2. MCS certified installers to deliver Warm Homes Loan Scheme - MCS, mcscertified.com
3. £100 energy payments and no gas standing charges: How the Budget will change your energy bills - Which?, which.co.uk
4. Low-interest loans for heat pumps now available - how to apply, inews.co.uk
5. Homes across UK to get low- or no-interest loans to fund solar panels and heat pumps | Energy bills | The Guardian, theguardian.com
6. Autumn Budget: Energy bills a priority, action ‘lukewarm', solarpowerportal.co.uk