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Lloyds offers free Octopus air-source heat pumps with new mortgage deal

Maximilian Schwerdtfeger
Written By
Tamara Birch, senior writer, The Eco Experts
Reviewed By
Published on 20 October 2025
  • Banking giant to work with Octopus Energy to boost roll out
  • Lloyds to pay for additional costs not covered by the Boiler Upgrade Scheme
  • Sixty per cent of Lloyds customers say a heat pump has made their home more comfortable
An air-source heat pump being installed by an engineer.
Lloyds customers could soon get an air-source heat pump for free.

Customers who take out a new mortgage with Lloyds before the 24 November could get an Octopus Energy air-source heat pump for free after the bank announced it would cover any additional installation costs not covered by the Boiler Upgrade Scheme or other government grants. 

In a statement, the banking giant said recent research it carried out showed that 60% of households who’d recently installed a heat pump said their homes were warmer in winter and “generally more comfortable to live in”.

On top of that, it said 77% of households claimed having a heat pump would increase the value of their home. 

A heat pump

Get £7,500 towards your heat pump installation through a trusted installer

An MCS-certified heat pump installer can apply for the Boiler Upgrade Scheme on your behalf, get a quote from one now

The bank said an air-source heat pump would cost a three-bedroom house about £11,400, £7,500 of which could be covered by the Boiler Upgrade Scheme. The remaining £3,900 is roughly the same cost as a new boiler, and under this mortgage offer scheme it would be covered by Lloyds, lowering the cost to the customer to £0. 

To qualify, customers need to:

  • Be eligible for the government’s Boiler Upgrade Scheme.
  • Hold or open a Club Lloyds bank account at the time of applying (£5 per month fee, refundable each month you pay in £2,000 or more).
  • Apply for a new Lloyds mortgage or product transfers between 15 October and 24 November 2025 for a home in England.
  • The home must be rated EPC C or D.
  • Claim their heat pump from Lloyds and Octopus within 12 months of their mortgage completing.

Kate Townson, relationship mortgages director, Lloyds Bank, described the offer as a “valuable opportunity to deepen our understanding of the broader challenges customers face as they move to more sustainable energy solutions”.

Also commenting, Rebecca Dibb-Simkin, chief product and marketing officer, Octopus Energy, called heat pumps “quietly transformative”.

“Our customers tell us they’re cosy, efficient and reliable, and now for some Lloyds mortgage customers they can be completely free,” she said. 

To be eligible, you must meet the following requirements:

  • You must own the property you’re applying for, including if it’s a business, a second home, or a property you rent out to tenants
  • You must be replacing fossil fuel heating systems, such as oil, gas, electric of LPG
  • You must have a valid EPC certificate

For more information on the Boiler Upgrade Scheme, read our dedicated page.

A heat pump

Get £7,500 towards your heat pump installation through a trusted installer

An MCS-certified heat pump installer can apply for the Boiler Upgrade Scheme on your behalf, get a quote from one now

Written By

Maximilian Schwerdtfeger

Max joined The Eco Experts as content manager in February 2024. He has written about sustainability issues across numerous industries, including maritime, supply chain, finance, mining, and retail. He has also written extensively for consumer titles like City AM, The Morning Star, and The Daily Express.

In 2020, he covered in detail the International Maritime Organisation’s (IMO) legislation on sulphur emissions and its effects on the global container shipping market as online editor of Port Technology International.

He also explored the initiatives major container ports and terminals have launched in order to ship vital goods across the world without polluting the environment.

Since then, he has reported heavily on the impact made by environmental, social, and governance (ESG) practices on the supply chain of minerals, with a particular focus on rare earth mining in Africa.

As part of this, in 2022 Max visited mines and ports in Angola to hone in on the challenges being faced by one of the world’s biggest producers of rare earth minerals.

His most recent sustainability-related work came much closer to home, as he investigated the eco-challenges faced by independent retailers in the UK, specifically looking at how they can cut emissions and continue to thrive.

Max lives in South London and is an avid reader of books on modern history and ghost stories. He has also recently learned to play the game Mahjong and takes every opportunity to do so. He is also yet to find a sport he doesn’t enjoy watching.

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Reviewed By

Tamara Birch, senior writer, The Eco Experts

Tamara is a London-based journalist and has written about environmental topics for more than four years. This includes advising small business owners on cost-effective ways, like solar panels and energy-efficient products, to help them become more sustainable.

She has used her journalist and research skills to become highly knowledgeable on sustainable initiatives, issues, and solutions to help consumers do their bit for the environment – all while reducing monthly costs.

In addition to adopting sustainable practices in her personal life, Tamara has worked in the retail B2B space to help independent retailers think about their environmental choices and how they can help improve their business. She now uses this knowledge to help consumers do the same.

Her passion for sustainability and eco-friendly solutions stems from a long obsession with nature and animals and ensuring they feel looked after. In her free time, Tamara enjoys reading fantasy novels, visiting the gym, and going on long walks in new areas.

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