The Warm Homes Loan Scheme Is Not a Grant. It Is £300 Million Spent Making the Loan Cheaper.
DESNZ published the end-user privacy notice on 17 September, which is the part of a scheme that appears when households are about to be involved. The Scheme Rules set out what it funds, what it caps, and who can borrow. It covers the whole United Kingdom, and the clause that says so is easy to miss.
By Energy Pages
Most government energy schemes hand over money towards the work. This one does something different, and the difference decides whether it is any use to a particular household: the Warm Homes Loan Scheme pays to make borrowing cheaper, and the household still borrows the whole cost.
It has been visible to the finance industry since June. It became visible to households on 17 September 2026, when the Department for Energy Security and Net Zero published the scheme’s end-user privacy notice — the document that explains how a borrower’s data will be handled. That is not a launch announcement, and it is the thing that appears when one is close: the Scheme Rules put the initial consumer launch phase from September 2026.
What it actually does
The scheme deploys £300 million of grant capital, and the grant does not reach the householder. It reaches the loan. Money is paid to participating lenders to reduce the rate they charge, with the Scheme Rules describing a reduction of up to 5 percentage points from the lender’s starting rate, on loans with a term of three years or more.
So the product a household eventually sees is an ordinary retrofit loan from an ordinary lender, at a rate that has been bought down. Credit checks, affordability assessment and the lending relationship all stay with the lender. The Scheme Rules are explicit that there is no income-based eligibility threshold — the test is the lender’s normal affordability test, not a means test.
Who can borrow: owner-occupiers and private rented sector landlords. Owners of several properties may take a loan for each one.
What it will fund, and the ceiling on each
| Measure | Loan cap |
|---|---|
| Solar PV | £15,000 |
| Electrical battery storage | £15,000 |
| Air-to-water source heat pump | £20,000 (before any BUS grant is deducted) |
| Ground source heat pump | £35,000 (before any BUS grant is deducted) |
| Biomass boiler | £20,000 (before any BUS grant is deducted) |
| Heat network connection | £7,500 |
| Micro-renewables (domestic wind, micro hydro) | £20,000 |
Two details inside that table are worth pulling out. An EV chargepoint counts as an eligible ancillary cost on a solar or battery loan, which is the cheapest route to a charger in any current scheme. And air-to-air heat pumps are listed but not currently eligible. Be careful with the reason given for this second-hand: air-to-air units are now eligible plant under the Boiler Upgrade Scheme for a home — S.I. 2026/390 inserted a regulation 9A excluding them only “in relation to a non-residential building” — so “not eligible for BUS” is no longer a correct explanation. The binding obstacle is certification: MCS has no product and installation standard for air-to-air, and the loan scheme requires an MCS-registered installation.
That certification requirement is the other condition: measures must be installed by an MCS-registered installer. MCS has no standard covering a heat network connection, so that measure cannot meet a requirement written around MCS; the Rules do not set out how the exemption is worded, and Energy Pages has not found it stated anywhere.
How it sits with the grants
It is designed to sit underneath them rather than instead of them. The Scheme Rules name the Boiler Upgrade Scheme and the Scottish Government’s Home Energy Scotland scheme, and give the worked case: an applicant in England or Wales installing a heat pump with a BUS grant can take a WHLS loan for the cost above the grant. If BUS eligibility changes, the loan scheme mirrors the change.
For a household weighing a heat pump, that is the practical shape: the £7,500 BUS grant comes off the price, and this is the mechanism intended to make the remainder borrowable at a lower rate than the market would otherwise offer.
Northern Ireland is in, and the Scheme Rules say so directly
The Scheme Rules never use the words “Northern Ireland” — but they do not need to, because section 3, “Geographic extent”, settles it at paragraph 7: “Any domestic property located in the United Kingdom is eligible under the Scheme, which is designed to operate alongside existing schemes in the devolved administrations.”
That is an inclusion clause written by extent rather than by list, which is how these documents usually handle it. A household in Northern Ireland is eligible on the same terms as one in Kent.
What differs is the interaction. The complementary grant schemes the Rules name are the Boiler Upgrade Scheme, which does not run in Northern Ireland, and Home Energy Scotland. So the worked example the Rules give — take the BUS grant, borrow the remainder cheaply — has no Northern Ireland equivalent, and a Northern Ireland borrower is likely to be financing more of the cost rather than topping up a grant. That is a real difference in what the scheme is worth to you, and it is not a difference in whether you qualify.
What is not knowable yet
Which lenders. The first application window ran in June and has closed; the next is expected in late 2026 for onboarding in early 2027. The scheme invited banks, building societies, credit unions and specialist lenders. No list of participating lenders has been published, so there is no product to compare and no rate to quote.
The rate a household will actually be offered. Five percentage points off a starting rate tells you the size of the intervention, not the number on the agreement. That depends on the lender, the term and the borrower.
Anything about how it is sold. A scheme that pays lenders to lend more cheaply for a specific purpose creates an incentive to sell the loan. DESNZ consulted separately on reforming consumer protection for home upgrade schemes — that consultation ran from 17 June to 10 September 2026 and the responses are being analysed, so the protections that will sit around this lending are being rewritten at the same time as the lending starts. Worth watching rather than worrying about.
Sources, read 18 September 2026: Warm Homes Loan Scheme: end-user privacy notice (published 17 September 2026) and Warm Homes Loan Scheme: apply to participate as a lender (Phase 1), including the Scheme Rules (September 2026 edition, 67 pages), which is where the loan caps, the eligible measures, the rate reduction, the timings and the geographic extent are taken from; the Northern Ireland position is section 3, paragraph 7. The Boiler Upgrade Scheme points are from The Boiler Upgrade Scheme (England and Wales) (Amendment) Regulations 2026, read 18 September 2026. Energy Pages is an independent information service, not a government body, a delivery agent, a lender or an installer, and nothing here is financial advice.