The short answer: Yes. You can get a heat pump with a Warm Homes Loan, and you can use it on top of the Boiler Upgrade Scheme grant. The grant takes £7,500 off the price (£9,000 if you’re replacing oil or LPG and have no mains gas, until 31 March 2027), and the loan can cover what’s left. The government pays lenders to cut the rate, so loans are up to 5 percentage points cheaper and some are interest-free. There’s no income test. The cap is £20,000 total cost for an air source heat pump and £35,000 for ground source, measured before the grant comes off.
Last verified: 30 October 2026 against the scheme rules (September 2026), GOV.UK Boiler Upgrade Scheme and Ofgem.
Good news from the Budget: on 28 October 2026 the government said it will keep the Boiler Upgrade Scheme at £400 million in 2027–28, rising roughly with inflation after that. The Budget announced no change to the £7,500 grant. What else changed in the Budget.
How the grant and the loan stack
The scheme rules give this exact example: someone in England or Wales getting a BUS grant “can apply for a WHLS loan from a participating lender to cover any costs of installation above the level of the BUS grant received.” Your installer applies for the grant and takes it off your quote; the loan pays the balance.
| Example only | Air source, gas home | Air source, oil or LPG home, no mains gas | Ground source |
|---|---|---|---|
| Installer’s quote (example) | £12,000 | £12,000 | £25,000 |
| Boiler Upgrade Scheme grant | −£7,500 | −£9,000 (to 31 March 2027) | −£7,500 |
| Left to borrow | £4,500 | £3,000 | £17,500 |
| At 0% over 5 years | £75 a month | £50 a month | £292 a month |
| Within the cap? | Yes (£12,000 is under £20,000) | Yes | Yes (£25,000 is under £35,000) |
The quotes are example figures, not typical prices. Monthly amounts are simple division, assume an interest-free product and leave out fees; a product with interest costs more. For real price ranges see heat pump costs and ground source heat pump costs.
Warm Homes Loan caps for heat pumps
The caps apply to the total cost of the installation before the BUS grant is deducted, according to the scheme rules. Any extra work, such as new radiators, has to fit inside the same cap.
| Heating system | Cap on total cost (before grant) | BUS grant (England & Wales) | Most you’d borrow with the grant |
|---|---|---|---|
| Air source (air-to-water) heat pump | £20,000 | £7,500 (£9,000 oil/LPG off-gas) | £12,500 (£11,000) |
| Ground or water source heat pump | £35,000 | £7,500 (£9,000 oil/LPG off-gas) | £27,500 (£26,000) |
| Biomass boiler (rural homes, with a BUS grant) | £20,000 | £5,000 | £15,000 |
| Air-to-air heat pump | £10,000 once MCS certification exists; not eligible yet | £2,500 | — |
The scheme rules say a typical heat pump quote includes “necessary improvements to radiators, pipework and water tanks”. The loan “will not fund insulation as part of a heat pump installation”. The new heat pump must not replace an existing heat pump.
Who can get it?
| Rule | Boiler Upgrade Scheme grant | Warm Homes Loan |
|---|---|---|
| Where | England and Wales | Whole UK |
| Who | Property owners, including landlords, second homes and businesses | Owner-occupiers and private landlords, borrowing personally |
| Income test | None | None (lender credit checks) |
| What you’re replacing | Fossil-fuel heating: oil, gas, electric or LPG | Anything except existing low-carbon heating, such as a heat pump |
| Not eligible | Social housing, most new builds, homes already funded for a heat pump | Commercial property; homes that aren’t built yet |
| Installer | MCS certified; they apply for you | MCS certified |
GOV.UK says you’re still eligible for the BUS if you’ve already had insulation funded. For the full BUS rules see our Boiler Upgrade Scheme guide.
Heated by oil or LPG? The £9,000 deadline
If your home is heated by oil or LPG and has no mains gas connection, the grant for an air source or ground source heat pump is £9,000 instead of £7,500. Ofgem says this “is available until 31 March 2027”. GOV.UK says the installer must commission and install the heat pump within 120 days of applying, so ask for a survey well before the deadline. With £9,000 off, the amount you’d need to borrow falls by £1,500. Read more about the £9,000 oil and LPG heat pump grant.
The lenders
Ten lenders are on the GOV.UK list: HomeServe Finance (with E.ON), Hometree Finance, The Money Co-Op, Propensio, Secure Trust Bank (V12 Retail Finance), Selina Finance, South Manchester Credit Union, Sunsave Energy, Tandem Bank and This Bank. We list them for information only: we don’t earn commission from any lender, and we don’t arrange credit.
Each lender chooses which measures to cover, and DESNZ says some “will partner with specific installers only”. So the easiest route is usually to ask your heat pump installer which Warm Homes Loan lender they work with. For each lender’s details see the main Warm Homes Loan guide.
How to get a heat pump with a Warm Homes Loan
- Get quotes from MCS-certified installers. Ask each to confirm you’re eligible for the BUS grant and show it taken off the price.
- Ask about finance. Which Warm Homes Loan lender, the APR, the term, any fees and the total repayable.
- Agree the quote. The installer applies for the grant on Ofgem’s system. Ofgem will contact you to confirm the installer is acting for you.
- Apply for the loan through the installer, directly with a lender, or through your mortgage provider. Check the agreement says it’s funded through the Warm Homes Loan Scheme.
- Installation within 120 days of the grant application.
- Keep your paperwork: quote, finance agreement, invoice and MCS certificate, in case you’re picked for an audit.
Scotland, Wales and Northern Ireland
- Wales: the Boiler Upgrade Scheme and the Warm Homes Loan both apply. See energy grants in Wales.
- Scotland: no BUS, but GOV.UK says Home Energy Scotland grants can be used alongside a Warm Homes loan. See energy grants in Scotland.
- Northern Ireland: the Warm Homes Loan applies; GOV.UK says the Boiler Replacement Scheme is closed.
Watch out for heat pump finance scams. You apply to a lender or installer, never to the government. Only take finance from a lender on the GOV.UK list, check the agreement names the Warm Homes Loan Scheme, and never sign on the doorstep. Report suspected scams to Warm Homes Counter Fraud: WHLScounterfraud@energysecurity.gov.uk. Check your installer on the MCS website. For a lender complaint you can go to the Financial Ombudsman Service; for an installer, go to MCS.
Heat pump loans: common questions
Can I get a heat pump with the Warm Homes Loan?
Yes. Air source (air-to-water) and ground source heat pumps are covered, including water source heat pumps and shared ground loops. You need to own the home, use an MCS-certified installer and pass the lender’s credit checks. The heat pump must not replace an existing heat pump.
Can I use the Warm Homes Loan with the Boiler Upgrade Scheme?
Yes. The scheme rules say that if you’re applying for a Boiler Upgrade Scheme grant, you can take a Warm Homes Loan “to cover any costs of installation above the level of the BUS grant received.” The BUS is currently one of only two grants the loan is designed to sit alongside; the other is Home Energy Scotland.
How much can I borrow for a heat pump?
The caps are set on the total cost of the job before the grant comes off: up to £20,000 for an air source heat pump and up to £35,000 for a ground source heat pump. So with a £7,500 grant, the most you would borrow for an air source heat pump is £12,500.
Is the heat pump loan interest-free?
Some products are. DESNZ says ten lenders are “initially offering loans, some interest free”, with rates up to 5 percentage points lower than ordinary loans. Each lender sets its own rate and term, so compare the APR and the total amount repayable.
Is there an income limit?
No. The government sets no income limit for the Warm Homes Loan or the Boiler Upgrade Scheme. The lender checks your credit and affordability.
When does the £9,000 heat pump grant end?
Ofgem says the £9,000 rate for air-to-water or ground source heat pumps in eligible off-gas homes “is available until 31 March 2027”. GOV.UK says your installer must install and commission the heat pump within 120 days of applying, so start early.
Does the loan cover radiators and a hot water tank?
Yes, as part of the heat pump job. The scheme rules expect a typical quote to include “necessary improvements to radiators, pipework and water tanks”, inside the same cap. It will not fund insulation.
Can I get an air-to-air heat pump with the loan?
Not yet. The scheme rules say air-to-air heat pumps “are not currently eligible” because they can’t yet meet the MCS certification requirement. A £10,000 cap is set for when they can. The Boiler Upgrade Scheme does offer £2,500 off an air-to-air heat pump.
I live in Scotland or Northern Ireland. Can I still get one?
The Warm Homes Loan covers the whole UK. The Boiler Upgrade Scheme is England and Wales only. In Scotland, GOV.UK says Home Energy Scotland grants can be used alongside a Warm Homes loan. Northern Ireland’s Boiler Replacement Scheme is closed.
Is Great British Energy Guide a lender?
No. We are an independent guide. We don’t lend, arrange credit or earn commission from lenders. If you ask for a quote, we pass your enquiry to one MCS-certified heat pump installer, and you can ask them about Warm Homes Loan finance.