What is the Warm Homes Loan Scheme and how does it work?
Published on 28th October 2026
Harriet Butcher, Head of Public Affairs Retail
Solar panels, a home battery, a heat pump – most of us like the sound of them. They can help save energy, which in turn can help lower bills. But it's the upfront cost that tends to stop us in our tracks.
That's exactly the hurdle the Warm Homes Loan Scheme is designed to clear. Part of the £15bn Warm Homes Plan, it's a government-backed scheme that makes it cheaper to borrow the money to pay for home energy upgrades. So you can spread the cost of a greener home instead of having to find the money all at once.
What is the Warm Homes Loan Scheme?
Launched in October 2026, the Warm Homes Loan Scheme is part of the government's £15bn Warm Homes Plan – the biggest public investment in home upgrades in British history, aiming to improve up to 5 million homes and make them more energy-efficient.
The government wants to help make Britain’s homes warmer, greener and cheaper to run. But it’s not lending money directly to homeowners. Instead, it’s giving banks, building societies and other approved lenders a helping hand. This comes in the shape of a non-repayable capital grant of up to 20% of loan amounts.
That means lenders can offer zero or low-interest borrowing, which they might not otherwise stretch to. The support sits quietly in the background, and you simply apply to a lender just as you would for any other loan.
Is the Warm Homes Loan Scheme a grant or a loan?
It's a loan. It's worth being clear on that, because the two often get talked about in the same breath.
- A grant is money that doesn’t need to be paid back. The Boiler Upgrade Scheme is a good example – it gives eligible households £7,500 towards a heat pump, which doesn’t need to be repaid.
- A loan is borrowed money that does need to be paid back. The Warm Homes Scheme Loans are a lower interest rate, so are cheaper than other borrowing options.
The good news is that it’s not an either/or. Warm Homes Plan low-interest loans are designed to work alongside existing support, including the Boiler Upgrade Scheme and the Home Energy Scotland grant. So you could use the grant worth up to £9,000 to bring the price of a heat pump down, then borrow the rest of the cost at a friendlier rate.
If you’re looking for help with your energy bills rather than finance for home improvements, take a look at our guide to the winter energy support schemes available across the UK.
What technologies are covered?
The scheme covers low-carbon heating, home-generated electricity and battery storage. Each technology has its own maximum loan amount – and these are before any grant deductions. These limits are borrowing caps, not sums of money being handed over.
| Technology | Maximum loan | Good to know |
|---|---|---|
| Air source heat pumps | £20,000 | Can cover eligible associated works, not just the heat pump itself. |
| Air-to-air heat pumps | £10,000 | These become eligible once MCS product, design and installation standards are introduced. |
| Ground source heat pumps | £35,000 | Includes water source heat pumps and shared ground loops. |
| Biomass boilers | £20,000 | Rural properties only. |
| Solar panels | £15,000 | Roof-mounted solar only. Extras like scaffolding, safety equipment and your grid connection can be covered. |
| Home batteries | £15,000 | On their own or alongside solar panels. Can cover linking up an existing solar system, monitoring apps and safety devices. |
| Heat network connections | £7,500 | For homes able to join an existing or planned low-carbon heat network. |
| Micro-renewables | £20,000 | Domestic wind turbines and micro hydroelectric systems only. |
| EV chargers | To be confirmed | Only available as part of a solar and/or battery installation. Cannot be combined with an OZEV or any other public grant for the same chargepoint. |
There are a few things the Warm Homes Plan loans won't cover. These include insulation and any replacement roofing or structural work your home might need before solar panels can go on. If you need these, lenders are free to offer you separate finance in the usual way.
Warm Homes Loan Scheme eligibility
This is where the scheme differs from a lot of government energy support because there's no income test. Eligibility for the Warm Homes Loan Scheme is based on who you are and what you're installing, not on what you earn.
You may be eligible if:
- You own and live in your home, or you're a private landlord borrowing in your own name
- You're having eligible technology installed by an MCS-certified installer, to MCS standards
- You pass your lender's usual credit and affordability checks
The scheme is UK-wide and designed to sit alongside schemes already running in Scotland and Wales. And if you own more than one property, you can apply for a loan for each of them.
How to apply for Warm Homes Plan loans
You won't apply to the government – you'll apply directly to a participating lender. Here's how it's expected to work:
Choose your upgrade
Decide what's right for your home, whether that's solar panels, a home battery, a heat pump or a combination.
Get a quote
This must be from an MCS-certified installer - your lender may ask to see it before approving your loan.
Apply to lender
Participating lenders will run their normal credit and affordability checks.
Have accredited installation
This must be carried out to MCS standards, and the government funding will be released to your lender afterwards, once the installation is verified.
Repay your loan
This will be at the reduced rate, with the cost spread over time.
Initially, 10 lenders including British Gas’ partner Sunsave are offering loans, so there is a range to choose from. Some are offering interest-free loans, and repayment terms vary with some offering up to 30 years to repay – so it’s worth comparing offers to find the one that’s right for you.
How British Gas can help
We've been helping to keep Britain warm for a very long time and we're ready to help you make the switch – whether that's a heat pump, solar panels or a home battery.
If you're weighing up your options, now's a good time to check our heat pumps, solar panels and battery storage pages.
Frequently asked questions
Is the Warm Homes Loan Scheme the same as the Warm Homes Plan?
No. The Warm Homes Plan is the government's wider £15bn programme. The Warm Homes Loan Scheme is one part of it – the bit that helps homeowners spread the cost of low-carbon upgrades.
Is this the same as the Government Warm Home Scheme?
Yes. People search for the government Warm Home Scheme, the Warm Home Fund and Warm Homes Plan loans, and they all point to the same place: government-backed, low-interest borrowing for home energy upgrades.
Do I need to be on a low income to qualify?
No. There's no income-based eligibility for Warm Homes loans. You'll still need to pass your lender's standard credit and affordability checks.
Can I combine a Warm Homes loan with the Boiler Upgrade Scheme?
Yes. The two are designed to work together. You could use the grant worth up to £9,000 towards a heat pump and borrow the remaining cost through the scheme.
Can landlords apply?
Yes. Private landlords borrowing in their own name can apply, and owners of several properties can apply for a loan for each one.
Does the scheme cover insulation?
No. Insulation isn't covered by the Warm Homes Loan Scheme, and neither is replacement roofing or structural work needed before solar panels are fitted.
Can I get a loan just for an EV charger?
No. An EV charge point is only eligible as part of a solar panel and/or battery installation.
Who do I apply to?
So far, 10 lenders are part of the Warm Homes Loan Scheme, and each sets its own rates and terms. You should choose the lender that works best for you and apply to them directly – not the government.
Discover more advice and support from The Source
Whether you're looking for help with managing energy bills, saving energy at home, preparing for winter or making your home more energy efficient, The Source has something for everyone. Discover practical guides, expert advice, greener living inspiration, smart technology insights and the latest information to help you stay informed, reduce costs and get more from your home and energy.