Heat pumps are growing in popularity as households look for cleaner, more efficient ways to heat their homes. While they can lower energy bills and reduce carbon emissions, the upfront costs can be high. Financing can spread costs over time. This page explains common ways homeowners fund heat pumps.
Buying and installing a heat pump requires a significant investment, which financing can help spread out over time. Homeowners often face challenges such as:
The installation cost of a heat pump system depends on the type you choose and the size of your property.
Eligible homeowners in England and Wales can reduce upfront costs with a grant through the Boiler Upgrade Scheme, available for both air-source and ground-source heat pumps. Note: The Boiler Upgrade Scheme does not support hybrid heat pumps.
Personal loans provide flexibility with fixed monthly repayments. Typically, the loan term is one to seven years, though lenders may offer longer terms.
Tied to your property, these loans may allow higher borrowing limits and longer terms; rates and total cost vary. However, they carry more risk. Secured loans use your home as security, and your home may be repossessed if you do not keep up repayments on a debt secured on it.
Specialist lenders may offer reduced rates or longer repayment terms for eco-friendly upgrades.
Some installers and manufacturers partner with finance providers to offer structured repayment plans.
Financing your heat pump installation can provide multiple advantages.
Turn a large upfront payment into smaller monthly instalments.
Secure a grant and use financing to cover the remaining balance.
A heat pump can lower bills depending on tariffs, property fabric, and system design.
Leave your emergency fund or savings intact while still upgrading your home heating.
Energy-efficient homes are often more attractive to buyers, and a heat pump can be a strong selling point. However, while the upgrade may make the dwelling more attractive to some buyers, it is not guaranteed.
Yes. Financing options include personal loans, secured loans, and manufacturer financing. In addition, grants like the Boiler Upgrade Scheme help reduce upfront costs. Interest bearing loans will increase the amount you pay compared with paying upfront.
The BUS provides a grant of £7,500 to eligible homeowners in England and Wales installing air-source or ground-source heat pumps. This significantly reduces upfront costs.
Heat pumps in the UK cost anywhere from £7,000 to £27,500. For example, air-source heat pumps usually cost between £7,000 and £13,000, while ground-source systems may range from £20,000 to over £40,000, depending on depth and geology.
System type (air-source vs ground-source), property size, required insulation or radiator upgrades, and groundworks all play a role in determining the final cost.
It can be, depending on your home, tariffs, and design. Many households see lower carbon and competitive running costs when systems are well specified and installed.
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