✔ You can pay for a new boiler over several years
✔ Many companies offer plans with 0% interest
✔ You can get quotes for a new boiler by filling in the form above
Sometimes you need a new boiler, but the cost of a new boiler is too much.
Buying a boiler on finance can be a simple solution to this stressful problem, allowing you to spread the cost over several years.
In this guide, we’ll explain what this type of payment structure involves, give you the tools to figure out whether it’s right for you, and explain how and where you can choose between different boilers on finance.
Want to buy a new boiler without the help of a boiler finance scheme? Just fill in this short form, and our trusted installers will send you free, bespoke quotes.
What is a boiler finance scheme?
A boiler finance scheme allows you to pay for a new boiler over the course of a few years or even a decade, instead of having to part with a large lump sum all at once.
This means you can get a boiler when you need it, rather than waiting until you’ve saved up enough money to afford the £4,000 that a new boiler costs, typically.
You’ll be charged a certain amount of money each month, until you’ve paid off the full cost of your boiler.
Depending on the terms of your agreement, you may have to pay interest on the boiler’s price – but many companies offer schemes without interest.
How does a boiler finance scheme work?
A boiler finance scheme works much like a mobile phone plan: you get a boiler installed in your home straight away – sometimes after an upfront deposit of around 10% – then you pay the seller a previously-agreed amount every month.
Once the contract has reached its conclusion and you’ve paid off the boiler’s total price, the monthly payments will stop and you’ll own the boiler outright.
Finance schemes are offered alongside other payment options, so when you’re searching through the best boilers to find the right one for your home, companies will offer you the choice between paying upfront or over a number of years.
If you choose a boiler finance scheme, you’ll usually get the option of picking either a plan with 0% APR (Annual Percentage Rate), or a plan with between 7.99% and 11.99% APR.
Schemes with 0% APR are much cheaper, but will require you to pay off your purchase quicker – usually within 2-4 years – while a payment plan that includes interest will usually last 10-12 years – but is significantly more expensive overall.
How much do you usually pay for a boiler on finance?
You’ll pay the same amount for a boiler on a finance scheme – plus any interest included in your contract.
If you choose a plan that offers 0% APR, you’ll pay the exact price of the boiler; you’ll just pay it off over 2-4 years, instead of instantly.
Here are some examples of how a three-year boiler finance scheme with 0% APR might look.
Boiler cost | APR | Monthly payment for 36 months | Overall cost | Overall increase |
|---|---|---|---|---|
£3,000 | 0% | £83.33 | £3,000 | 0% |
£4,000 | 0% | £111.11 | £4,000 | 0% |
£5,000 | 0% | £138.89 | £5,000 | 0% |
If you pick a finance scheme with a higher APR, it’ll usually add between 7.99% and 11.99% to the amount you have to pay off – every year.
For the average £4,000 boiler, this adds up over a 10-year period – as you can see below.
Boiler cost | APR | Monthly payment for 120 months | Overall cost | Overall increase |
|---|---|---|---|---|
£4,000 | 7.9% | £47.75 | £5,730 | 43% |
£4,000 | 9.9% | £51.71 | £6,205 | 55% |
£4,000 | 11.9% | £55.77 | £6,693 | 67% |
What are the requirements for a boiler finance scheme?
You generally have to fulfil the following requirements to qualify for a boiler finance scheme.
You must have:
- Been a permanent UK resident for the past three years
- A valid passport and UK driving licence
- An electricity bill in your name from the past three months
- Be between 18 and 85 years old
You’ll also need a source of income that will reassure the organisation loaning you the money that you’ll be able to repay it.
Most companies, including energy suppliers like British Gas and E.ON, act as credit brokers, meaning they won’t be the one to lend you the money.
That honour will go to an established, accredited lender, such as Creation Consumer Finance Limited, which performs this role for E.ON.
This lender will conduct an approval process to assess whether you’ll be able to repay the loan, and will run a credit check on you.
Most households will pass these checks, so as long as you fulfil the requirements listed above, you should be set.
Is a boiler finance scheme a good idea?
A boiler finance scheme could be an excellent idea if you can’t pay the price of a new boiler, or simply don’t want to.
If you choose a finance scheme with 0% APR, it won’t cost you any more than it would in normal circumstances. You’ll just spread the payments out.
However, you must be certain that you’ll be able to afford the regular payments.
And be careful about agreeing to a higher APR, as it’ll mean paying a larger amount in total. For instance, 7.9% APR will make your boiler 43% more expensive overall.
This kind of plan may still suit you, as it generally gives you 10-12 years to pay it off, but it’s worth being wary and making sure you can set the necessary money aside.
If you’re not sure you’ll be able to pay the monthly amounts required by a boiler finance scheme, you may qualify for a government grant.
Pros and cons of boiler finance schemes
Pros | Cons |
|---|---|
You don’t have to pay the total cost upfront | You must be able to pay the same amount every month for years |
With a 0% APR scheme, you’ll pay the same amount | On a scheme with more than 0% APR, you’ll pay more than the boiler’s price |
You can spread the payments over years | Anyone over 85 may not be eligible |
You can get a new boiler when you need it, rather than just when you can afford it | The payments will hang over you for years |
You can usually pay in more at any time to cut your repayment time |
Things to consider before buying a boiler on finance
Before buying a boiler on finance, consider the following questions.
Are you able to pay the full amount up front? If so, this may be the better option for you, as you won’t have to keep up with monthly payments for anywhere from two to 10 years.
Do you have an income stream you can rely on for the length of your plan? Make sure you’ll be able to afford every monthly payment, otherwise your boiler can be repossessed, you can be taken to court, and your credit may be affected.
Do you want a longer plan with lower payments? This type of plan will usually last 10-12 years and come with a higher APR, meaning you’ll pay a higher price overall for your boiler – about 55% more, on average.
Do you want a shorter plan with higher payments? These finance schemes usually last 2- 4 years and charge 0% APR, which means you’ll only pay the original cost of the boiler – but at a faster speed, so your monthly payments will be higher.
Do you qualify for a free boiler through the government’s ECO4 scheme? Check our guide to free boiler schemes and government grants, as there’s no point paying for a boiler if you don’t have to.
Which companies currently offer boilers on finance?
Some energy companies offer boilers on finance by acting as a credit broker, including British Gas and E.ON.
You can also check out numerous comparison websites that work in much the same way, including Boiler Central, Heatable, and Uswitch.
Any of these sites will allow you to compare offers from lenders, and may get a commission if you buy a boiler as a result.
Approach as many of these credit brokers as possible before making your final decision.
Summary
You now know everything you need to about boilers on finance.
If you think this kind of long-term payment structure is right for you, we’d advise you to proceed with caution, and make sure to get multiple quotes.
And if you’d rather buy a boiler outright and not have monthly payments hanging over your head for years, we can help you with that too.
Just fill in this short form, and our trusted installers will send you free, bespoke quotes.
