Offer finance for boiler upgrades

Make low-carbon heating affordable now

The UK is accelerating the shift from fossil fuel boilers to cleaner heating. For homeowners, the question is not just which technology to choose - it is how to pay for it sensibly. With the Boiler Upgrade Scheme budget doubled to £295 million for 2025-26, a £7,500 heat pump grant on the table, and 0% VAT on energy-saving materials until March 2027, the numbers are moving in your favour. The result is a smaller upfront outlay and clearer monthly repayments when finance is structured around the net cost after grants and VAT relief.

Understanding APR is not just about percentages - it is about what you pay in real terms over time. Heat pumps can cost from around £8,000 to £20,000 or more before support, with ground-source systems higher. A £7,500 grant can cover a significant chunk of many installations, and removing the previous insulation precondition has simplified eligibility and cut add-on costs. Record application volumes in 2025 show demand is real, but they also highlight practicalities such as installer lead times and voucher allocation windows.

Kandoo works with UK lenders and MCS-registered installers so homeowners can spread the remaining cost sensibly. That might be a fixed-rate personal loan, a point-of-sale green loan, or staged payments that align with Ofgem voucher milestones. The goal is straightforward - pair the right product with the right grant to deliver predictable payments and a smooth installation.

Heat your home efficiently, reduce exposure to gas price swings, and finance only what you need after grants.

Who benefits most

If you own a property in England or Wales and your home currently uses gas, oil, LPG or direct electric heating, the Boiler Upgrade Scheme can help reduce the upfront cost of moving to a heat pump or, in some rural cases, a biomass boiler. You will need an MCS-registered installer to handle the grant application on your behalf and to certify performance standards. If you want to keep cash reserves intact, finance can cover the residual balance after the grant and 0% VAT, giving you a predictable monthly figure while you enjoy lower running costs compared with older, inefficient systems.

Your choices at a glance

1. Air-source heat pump - typically lower upfront cost, widely suitable.

2. Ground-source heat pump - higher efficiency potential, higher upfront works.

3. Biomass boiler - £5,000 grant option for certain properties off the gas grid.

4. Unsecured personal loan - fixed-rate borrowing for the residual balance.

5. Point-of-sale green loan - offered via installers with tailored APRs.

6. Bridging finance aligned to BUS vouchers - staged or conditional releases.

7. Cash savings plus small top-up loan - reduce interest, keep liquidity.

Pounds and sense - what to expect

Who qualifies - the essentials

Eligibility is focused on property owners in England and Wales replacing existing gas, oil, LPG or direct electric systems with a low-carbon alternative. An MCS-registered installer must design and fit the system and will apply for the voucher with Ofgem on your behalf. Recent changes removed the previous requirement to insulate lofts or cavity walls before grant approval, which simplifies projects and avoids separate pre-works in many homes. Performance standards still apply - for example, minimum efficiency levels - and your installer will confirm these as part of the design. Grants are one-off per property for qualifying technologies, and you generally cannot stack multiple public funds for the same work. Finance should therefore target the remaining customer contribution after the grant and 0% VAT. If you are unsure how your property compares, Kandoo can connect you with accredited installers to confirm eligibility and provide exact quotes that fit compliant finance.

From quote to warm home - the steps

1. Get an MCS installer survey and fixed quote.

2. Installer submits BUS voucher application for you.

3. Choose finance for the net cost after grant.

4. Receive voucher allocation and confirm installation date.

5. Kandoo lender issues conditional approval and terms.

6. Works begin - staged or escrow payments if required.

7. System commissioned and MCS certificate issued.

8. Final funds released after voucher is redeemed.

Pros, cons and key trade-offs

Read this before you sign

High demand in 2025 has increased installer lead times. Ofgem has allowed over-allocation of vouchers to keep projects moving, which is helpful but introduces timing considerations for when discounts are confirmed. Build a realistic timeline from survey to commissioning and do not assume immediate installation dates. Ask your installer to clarify how the grant will appear on your invoice and when your finance will be drawn down. Check whether your electrical supply needs an upgrade and what that means for cost and schedule. Review APR, total amount repayable and any early-repayment charges so you understand the real cost of borrowing. Finally, confirm the 0% VAT treatment applies to your full scope of works and note the current expiry date, then keep paperwork in order in case rules change.

Alternative routes to upgrade

1. Pay in cash using savings, then replenish via overpayments on your mortgage.

2. Remortgage or take a further advance - consider fees and total interest.

3. Green home grants from local councils where available - check rules.

4. Delay major upgrade and improve controls, flow temperatures or insulation first.

5. Hybrid systems that combine a heat pump with an existing boiler.

Frequently asked questions

Q: How much could the BUS reduce my bill at installation? A: Up to £7,500 for air-source or ground-source heat pumps and £5,000 for qualifying biomass boilers, deducted from your installer invoice once the voucher is confirmed.

Q: Do I need insulation first to get the grant? A: No. The previous insulation precondition has been removed. Your installer will still design for efficiency and may recommend upgrades, but they are not a grant requirement.

Q: When does the 0% VAT rate end? A: The 0% VAT on eligible energy-saving materials runs until March 2027, helping reduce the upfront price of kit and installation during that period.

Q: What are typical costs after support? A: Many air-source projects fall to the low-to-mid thousands after the £7,500 grant and 0% VAT. Exact figures depend on property size, emitters and electrical works.

Q: Who applies for the grant? A: Your MCS-registered installer applies to Ofgem on your behalf and manages the voucher process through to redemption at commissioning.

Q: How do lenders handle voucher timing? A: Sensible options include staged payments, escrow or conditional releases tied to voucher allocation and commissioning, reducing the risk of adjustments later.

How Kandoo can help

Kandoo connects you with UK lenders and accredited installers so you can finance only the residual amount after the Boiler Upgrade Scheme grant and 0% VAT. We offer quick decisions, fixed monthly payments and options that align with voucher timing. Get a tailored quote, compare APRs and choose the path that fits your budget and your home.

Important information

This article provides general information only and is not financial or tax advice. Product availability, eligibility and incentives may change. Always check current rules for England and Wales and seek professional advice before committing to a loan or installation.