Warm Homes Loan Scheme: What It Is, Loan Caps and When You Can Apply
A government-backed scheme that cuts the interest rate on loans for heat pumps, solar panels and batteries. Here's how it works, what it covers, and where the launch has got to.
Status on 2 October 2026: the consumer phase was due to start in September, but the government has not yet published a list of participating lenders. You can't apply yet.
Quick answer: the Warm Homes Loan Scheme pays lenders a grant worth up to 20% of each loan, which they must pass on to you as a lower interest rate, up to around 5 percentage points off. It is a loan, not a grant, and you apply to an FCA-authorised lender, not the government. Loan caps are £15,000 for solar panels, £15,000 for a battery, £20,000 for an air-to-water heat pump and £35,000 for ground source. There is no income test and no minimum EPC, and it is open to owner-occupiers and private landlords across the UK. The first lenders were approved over the summer, but none had been named publicly when we checked on 2 October 2026.
Where the Scheme Stands in October 2026
The official line since June has been that loans would be available to the public from September 2026. September has been and gone. The government published the borrower privacy notice on 17 September, which is the paperwork you'd expect just before lenders go live, but there is still no public list of approved lenders and we haven't found a lender advertising a Warm Homes loan.
That doesn't mean the scheme is in trouble. It means launch is running at the pace of each lender's own product approval. The practical position for now: get your quotes and paperwork ready, and don't hand your details to anyone claiming to take applications.
What the Warm Homes Loan Scheme Is
Most people hear the name and assume it's a grant. It isn't. The government pays a capital grant, worth up to 20% of each loan, to the lender and not to you. The rules require all of that support to reach the borrower as a reduced interest rate. The lender can't keep it as margin.
In practice you apply to a bank, building society or finance provider, go through the same credit and affordability checks as any other loan, and pay less interest than you would on a standard home improvement loan for the same job. The government isn't lending you money. It is paying the lender to charge you less.
Two details shape what the products will look like. The subsidy only applies to loans with a term of three years or more, and the target is a rate cut of up to about 5 percentage points from the lender's normal rate. The Warm Homes Plan talks about "zero and low-interest" loans, and a lender with a low starting rate could get to 0% on shorter terms. But each lender sets its own APR, and no rates have been published.
What a Cheaper Rate Is Worth
Interest is the part of a solar or battery project that never shows up on the installer's quote. This is what £10,000 borrowed over five years costs at different rates:
| APR | Monthly payment | Total interest | Saving vs 9% |
|---|---|---|---|
| 9% (typical unsecured loan) | £206 | £2,353 | – |
| 6.5% | £195 | £1,687 | £665 |
| 4% | £184 | £1,031 | £1,322 |
| 0% | £167 | £0 | £2,353 |
Read this as an illustration, not a forecast. Nobody outside the lenders knows the rates yet. But a 5-point cut on a £10,000, five-year loan is worth about £1,322, which is real money against a solar install costing £6,000 to £7,000.
Loan Caps by Category
| What you're installing | Loan cap |
|---|---|
| Solar PV | £15,000 |
| Battery storage (on its own or with solar) | £15,000 |
| Air-to-water heat pump | £20,000 |
| Ground source heat pump | £35,000 |
| Air-to-air heat pump | £10,000 |
| Biomass boiler (rural homes) | £20,000 |
The solar and battery caps are separate, so a combined solar and battery system could draw on up to £30,000 of subsidised borrowing. Small wind and hydro and heat network connections are also on the list, and an EV charger can be included when it is bundled with solar or a battery. One detail most explainers miss: the heat pump loan can also cover the radiators and pipework a heat pump often needs, not just the unit. That matters because radiator upgrades are the cost people most often forget to budget for.
The loan sits alongside the Boiler Upgrade Scheme grant of £7,500, or £9,000 for oil and LPG homes. The grant comes off the quote first and the loan finances what is left. For a typical air source install that leaves a few thousand pounds to borrow, well inside the cap. Our heat pump costs guide has the numbers.
Who Qualifies
Loan, Grant or Free Upgrade: Which One Is for You?
The loan scheme is aimed at households who can afford to pay but would rather spread the cost. It is one of four routes, and they suit different people:
| Scheme | What you get | Who it's for | Status |
|---|---|---|---|
| Warm Homes Loan Scheme | A cheaper loan for solar, batteries and heat pumps | Any owner or private landlord who passes a credit check. UK-wide | Lenders not yet named |
| Boiler Upgrade Scheme | £7,500 off a heat pump (£9,000 for oil and LPG homes until 31 March 2027) | Any homeowner in England or Wales. No means test | Open, funded to 2029/30 |
| ECO4 | Free insulation and heating upgrades | Households on qualifying benefits or low incomes in Great Britain | Closes 31 December 2026 |
| Warm Homes: Local Grant | Free insulation, solar and heat pumps through your council | Income of £36,000 or less, EPC D to G, England | Open, funded to March 2028 |
If you might be on the free side of that table, check before you borrow anything. Our ECO4 eligibility checker takes two minutes.
If you're borrowing, compare the scheme loan with what's already on offer. Several energy suppliers and installers sell solar and heat pumps on 0% finance, and adding to your mortgage can be cheaper per month over a long term, though you pay interest for longer. Whichever you use, the test is the same: do the yearly bill savings cover the yearly repayments? Run your own numbers in the solar savings calculator or the battery calculator first. This is general information, not financial advice.
How to Get Loan-Ready Now
There is no application form yet, but there is useful preparation:
Watch out for: websites collecting your details for the "Warm Homes Loan Scheme" are gathering sales leads, not applications. There is no consumer application anywhere yet. Be wary of anything asking for personal or financial details, and of anyone who says the government will lend to you directly. The gov.uk scheme page is the place to check the current status.
Frequently Asked Questions
Related Guides
Published September 2026, updated 2 October 2026. Based on the government's Warm Homes Loan Scheme Rules (first published June 2026, revised September 2026) and the Warm Homes Plan. Participating lenders and rates had not been confirmed at the time of writing. Loan cost examples are illustrative. This is general information, not financial advice. Check gov.uk for the current status before applying anywhere.
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