The government has named the first 10 lenders in its Warm Homes Loan Scheme, which offers homeowners no- and low-interest loans for solar panels, batteries and heat pumps with nothing to pay upfront. The Department for Energy Security and Net Zero (DESNZ) published the list on 27 October 2026, with loans of up to £35,000 for a ground source heat pump and repayment terms of up to 30 years with some lenders.
The first lenders are HomeServe (partnering with E.ON), HTG Finance, Propensio, Secure Trust Bank, Selina Finance, South Manchester Credit Union, Sunsave, Tandem Bank, The Money Co-op and thisbank. DESNZ says more lenders and products will join as the scheme develops, and its scheme rules set the next lender application window for late 2026, with onboarding in early 2027.
The loans are part of the Warm Homes Plan, the £15bn home upgrade programme the government set out in January. They are available across England, Scotland, Wales and Northern Ireland.
How the interest cut works
Lenders set their own rates and run normal affordability and credit checks; the scheme has no income threshold. The government then pays the lender a non-repayable grant of up to 20% of the loan, which is used to bring the borrower's rate down by up to five percentage points, and never below zero. The grant only applies to loans of three years or more and is paid after the installation has been verified with MCS.
DESNZ gives the example of a £10,000 loan at 8% over seven years, which costs about £155 a month at today's high street rates. Through the scheme, the same borrower could save up to £285 a year in repayments, it says.
Funding comes from a single central pot, allocated first come, first served. DESNZ has promised lenders six months' notice when around six months of money is left.
What can be financed
| Measure | Maximum loan |
|---|---|
| Ground source heat pump | £35,000 |
| Air-to-water heat pump | £20,000 |
| Biomass boiler (rural homes only) | £20,000 |
| Micro-renewables (domestic wind, micro hydro) | £20,000 |
| Solar PV | £15,000 |
| Battery storage | £15,000 |
| Air-to-air heat pump (once MCS certification exists) | £10,000 |
| Heat network connection | £7,500 |
The heat pump caps apply before any Boiler Upgrade Scheme grant, and homeowners can combine a loan with a grant of up to £9,000 (Home Energy Scotland grants in Scotland). Air-to-air heat pumps cannot be financed yet because MCS standards for them are not in place.
Insulation, windows, doors and any roofing work needed before a solar installation are outside the scheme. Lenders may offer separate finance for those, but they get no government grant.
MCS installers only
Every installation apart from heat network connections must use an MCS-certified product, fitted by an MCS-certified installer to the relevant MCS standard. Lenders have to check both the installer and the installation, using an MCS data link where one exists, before the grant is released. Some lenders will only work with their partner installers, while others accept any MCS-certified firm.
The rules cover private rented sector landlords as well as owner-occupiers, and an owner of several properties can take out a loan for each one. For installers, that opens up landlord portfolios as well as single homes, at a time when installation skills are already short; LCM covered the gaps in its review of the trades facing the worst skills shortages in 2026.
Demand and savings claims
DESNZ says there were almost 150,000 solar panel installations in the first six months of 2026 and that heat pump sales reached a record high in 2025. It estimates that a heat pump, battery and solar panels together could save a household up to £550 a year on energy bills, and a further £300 a year on a time-of-use tariff.
Energy Secretary Miatta Fahnbulleh said the loans "will help families across the UK upgrade their homes with no upfront costs". Tandem, one of the first lenders, said it has already funded almost £1bn of energy efficiency improvements.
LCM set out what the industry wanted from the 28 October Budget on heat pump grants and retrofit in its Budget 2026 preview. The next round of lender applications opens in late 2026.
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