We’re Launching A Cashback Boost For Heat Pumps
We’re launching a cashback boost for lending that supports the installation of heat pumps.
The new cashback option is available for mortgage applications on properties that include a heat pump in a drive to encourage and accelerate the switch to low carbon heating technologies. Decarbonising domestic heating is a critical step to improve the energy efficiency of the UK’s homes to meet the UK’s net-zero ambitions.
The decision to introduce the cashback option for heat pumps comes at a time when the Government is recognising the urgent need to reduce the carbon impact of house building and has stated that new homes must reduce carbon emissions by 75% by 2025.
The cashback option is available on the Society’s new residential mortgages for self- and custom-build, renovations, conversions, and shared ownership as well as for further advances.
Ecology borrowe can claim £500 cashback when they install an Air Source Heat Pump (ASHP). The incentive is £1000 when a Ground Source Heat Pump (GSHP) is installed. The installer must be MCS Certified, giving confidence that the pump and installer are accredited to meet appropriate quality standards. The cashback is payable on receipt of the certificate of installation.
When claimed, the cashback also works in tandem with Ecology’s pioneering C-Change discounts which rewards the borrower with a discount of up to 1.50% based on the final energy rating for new builds and renovation projects on completion. The discount continues for the remaining term of the mortgage on completion of the build or renovation.
Borrowers in England and Wales undertaking a renovation or conversion may also be eligible for the Government’s Boiler Upgrade Scheme which provides £5,000 grants to homeowners towards the cost of an air source heat pump and £6,000 grants for ground source heat pumps. So, for example, an Ecology borrower installing an Air Source Heat Pump could potentially benefit from £5,500 combining the grant and cashback. The Government has set out an ambition to support the growth of the heat pump market to around 600,000 installation per year by 2028. Other schemes may be available in Scotland and Northern Ireland.
In addition, there is a zero rate of VAT for clean heating measures, helping to make heat pumps even more affordable for people looking to replace a gas or other fossil fuel boiler.
Heat pumps are a renewable heating system which will play a key role in the push to net zero. They transfer heat from the air or ground (depending on the type) to the home. They use electricity to transfer the heat but operate at much higher efficiency rates than conventional fossil fuel boilers They are considered efficient and clean heating sources because they don’t depend on burning a fossil fuel such as gas to create heat.
Daniel Capstick, Ecology’s Mortgage Manager explained,
“Decarbonising how we heat our homes is key to meeting our net-zero ambitions. Now, more than ever, it’s important that lenders play an active role in incentivising green building and helping to reduce energy bills.
“We’ve been leading the way on sustainable mortgages for over 40 years and the cashback option makes it more affordable to install heat pumps, incentivising our borrowers to build or renovate to higher energy efficiency standards, which is critical in the fight against climate change.”
“It also helps raise awareness of the role of heat pumps as we transition towards a sustainable future.”
MCS is an industry-led quality assurance scheme, which demonstrates the quality and reliability of approved products and installation companies.
For more information about Ecology’s sustainable mortgages and the option to claim a cashback following the installation of heat pump please click here.
Published: 21 October 2022
Author: Jennifer Whiteside