Boilers on Finance: Who Does the Best Deals?

boilers on finance

Not only does your boiler warm your home throughout the colder months, but it also provides the hot water you need for baths and showers, as well as washing up and cleaning.

You only need to have experienced a boiler breakdown to understand that your boiler is an essential item in your home.

Boilers are expensive to repair or replace. If your boiler stops working unexpectedly, remedying the situation could throw your home into financial difficulty

For this reason, many British homeowners rely on boiler finance.

Replacing your boiler on finance has a range of benefits, including:

  • lower energy bills because newer models are more efficient,
  • a lower risk of breakdowns and smaller repair costs if it does break down, and
  • lower carbon emissions meaning you’re doing your bit for the planet.

In this guide, we look in-depth at boiler finance and answer the following questions:

  • what is boiler finance?
  • how does boiler finance work?
  • what about interest-free boiler finance?
  • what about ‘buy now, pay later’ boiler loans?
  • when is it right to take out boiler finance?
  • when is it wrong to take out boiler finance?
  • am I at risk with boiler finance?
  • can people with bad credit get boiler finance?
  • where can I get boiler finance from?
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What is boiler finance?

The upfront costs of a new boiler are often more than most people have stashed away for a rainy day.

For those who want a new boiler without having to find the money for everything upfront, they take advantage of boiler finance schemes.

Boiler finance schemes are credit agreements which allow homeowners to spread th cost over a number of months or years.

How can I get boilers on finance?

boiler after care service
Credit: Worcester Bosch

There are a number of different boiler finance schemes available across the UK – from boiler suppliers, manufacturers and energy suppliers, as well as some banks

In order to apply for boiler finance, you’ll need to choose a finance product which is right for your financial situation and then make an application.

This will involve sharing a few of your personal details so that the credit provider can run a credit check and to ensure that you are able to afford your repayments.

If your application is accepted, the lender will then cover the upfront costs of the boiler and (in some cases) installation.

You then pay the lender back in affordable monthly repayments for the length of the agreed repayment period.

There are usually a range of different finance schemes available with differing repayment plans depending on the lender and your personal circumstances.

Most will require a deposit and you will need to pay interest on any amount that you borrow but, again, this will depend on the product you choose.

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The total cost of your loan

If you do have the available cash to pay for a new boiler outright, this will always be the cheapest and best option.

Lenders charge interest on credit – this is how they make their money.

The addition of interest to a loan means that you will always end up paying more for your boiler if you choose boiler finance. 

On top of this, not all boiler finance products include the cost of installation.

You should check to see that your chosen provider will cover installation costs and make sure that you can afford all of the upfront costs before committing to anything if they don’t. 

The interest rate

The amount of cash you pay in interest depends on how long you plan to repay it for and the interest rate charged.

The higher the interest rate, the higher your loan repayments will be.

However, the longer you repay the loan over, the lower your monthly repayments are. The downside is that you pay more overall in interest on loans taken out over a longer term.

You can use the advertised APR to help you to compare products. 

The deposit

Another factor to consider when planning to keep your costs lower on a boiler finance product is the size of the deposit you choose to pledge.  

The higher the deposit amount you choose, the less you need to borrow from the lender.

This means that the size of your monthly repayments will be lower.

Average customer deposits on boilers range from between 10-50% of the total boiler cost. 

This means finding £180 – £900 up-front depending on the boiler model you choose.

The length of time you take to repay your loan

A standard Pay Monthly boiler finance contract will often be repayable over up to 120 monthly instalments (10 years). 

However, there is often a lot of flexibility in the finance packages on offer – some allow you to pay back within as little as 12 months.

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A few examples of boilers on finance in action

9.9% interest per annum is common on many boiler installations so we’re now going to show you just what that would cost for these high-scoring boilers over 3 years, 5 years, and 10 years at 9.9% interest.

For each of these examples, we are factoring in a £1,000 installation charge on top of the price of the boiler so that you have a better idea of what the costs may be at the top-end of the scale.

We’re also assuming that your finance product will cover both the cost of the boiler and the installation and that you’re putting no deposit down.

Boiler finance for a smaller property

Make and Model NameEfficiency RatingParts and Labour WarrantyOutput kWPrice fromTOTAL
Baxi Platinum 24 Boiler89.00%12024£87092.69%
Length of loanNumber of repaymentsCost of boiler & installationMonthly repaymentsTotal repaidTotal interest charge
3 years36£1,870£59.88£2,155.68£285.68
5 years60£1,870£39.25£2,355.00£485.00
10 years120£1,870£24.17£2,900.40£1,030.40

Boiler finance for a medium-sized property

Make and Model NameEfficiency RatingParts and Labour WarrantyOutput kWPrice fromTOTAL
Baxi Platinum 33 Boiler88.90%12033£1,08092.18%
Length of loanNumber of repaymentsCost of boiler & installationMonthly repaymentsTotal repaidTotal interest charge
3 years36£2,080£66.11£2,379.96£299.96
5 years60£2,080£43.66£2,619.60£539.60
10 years120£2,080£26.89£3,226.80£1,146.80

Boiler size for a large property

Make and Model NameEfficiency RatingParts and Labour WarrantyOutput kWPrice fromTOTAL
Baxi EcoBlue Advance 40 Boiler89.10%12040£1,23591.80%
Length of loanNumber of repaymentsCost of boiler & installationMonthly repaymentsTotal repaidTotal interest charge
3 years36£2,235£71.75£2,583.00£348.00
5 years60£2,235£46.91£2,814.60£579.60
10 years120£2,235£28.89£3,466.80£1,231.80
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Boilers on interest free finance

When comparing boiler finance products, one of the things you may see again and again is the term ‘interest free’.

For anyone looking for an affordable finance product, interest-free sounds like a dream.

From the sounds of it, it seems that you just pay back just what you’ve borrowed with no interest charges at all. 

However, on an ‘interest free’ deal, the boiler installer receives less money from your installation from the finance company.

For example, if an installer offers you 1 year’s interest free finance, they have to add 5% to the quote to pay for the charges levied by the financier. 

For a five year deal, they might have to add 5% for each year of the deal.

The effect this would have on the Baxi EcoBlue Advance 40 Boiler on “interest free finance” would be:

Length of loanNumber of repaymentsCost of boiler & installationMonthly repaymentsTotal repaidTotal interest charge
3 years36£2,570£71.40£2,570.25£0.00
5 years60£2,794£46.56£2,793.75£0.00
10 years120£3,353£27.94£3,352.50£0.00

Looking at these calculations, the interest free rate, compared with the 9.9% interest rate, is not all that different.

The point we’re trying to make is that you’ll end up paying more in a different way whatever type of finance you take out than if you pay in cash.

To tell if you are really getting a better deal, it makes sense to look at the overall price instead of focusing on terms like ‘interest free’.

“Buy now pay later” for boilers

Some finance products offer a ‘buy now pay later’ facility.

If you then pay off the full amount of the loan before the end of the deferment period (normally no longer than 12 months), you will be charged no interest.

If you don’t pay off the full amount in time, interest will be charged at the rate set by the provider backdated to the start of the loan period. 

This interest rate will also be higher than what you would pay on most other types of repayment plan.

This is how it would compare with the Baxi EcoBlue Advance 40 Boiler if you took a buy now pay later where, if you didn’t pay on time, the interest rate you’re charged would be 24.9%.

Length of loanNumber of repaymentsCost of boiler & installationMonthly repaymentsTotal repaidTotal interest charge
3 years24£2,235£116.44£2,794.56£559.56
5 years36£2,235£85.87£3,091.32£856.32
10 years60£2,235£62.29£3,737.40£1,502.40

As you can see, the monthly charges are higher as is the total interest paid with this type of loan.

It only makes sense to take one out if you’re 100% certain you can make payment in full on or before the date of the end of the 12 month period.

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When is it right to take out boiler finance?

Using a boiler finance scheme could be the right option for you if:

  • you want to replace your old boiler with a new, more efficient boiler
  • you need to buy and install a new gas boiler
  • you want to make savings on your energy costs with a brand new, A-rated gas combi boiler
  • you cannot afford the lump sum required to buy and install a boiler at this time
  • you can afford to keep up with repayments for the entire length of the repayment period

When it is wrong to take out boiler finance?

Buying a new boiler on finance may not be the right choice for your household if:

  • you can afford to pay for and install your new boiler upfront. This offers a less risky option than tying yourself into a long-term financial contract.
  • you are eligible for the government’s free boiler scheme

Am I at risk with boiler finance?

Taking out any loan or credit product is a risk but, if you are careful and weigh up your options sensibly, then it may be worth it. 

You should be aware that:

  • your boiler will cost you more in the long run
  • there are lots of different finance products out there and researching these is crucial in finding the right product for you and your circumstances
  • if you find yourself unable to meet repayments during the repayment period, this will negatively affect your credit rating
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Can people with bad credit get boilers on finance?

Taking out more credit when you already have a bad credit rating is always a risk, but it is possible to get boiler finance in this situation. 

You will probably have to look to more specialist lenders, as opposed to high street banks and lenders, and these companies will only perform a ‘soft credit check’ that makes it more likely that you will be accepted.

You will still be able to choose from the same boiler products as those with good credit, but your repayment terms and deposit contribution are likely to be different, in order to protect the lender should you not be able to meet repayments.

It is best to only apply for any type of credit if you have at least a ‘fair’ credit rating.

Where can I get boiler finance from?

Many different types of companies offer boiler finance. 

Energy company boiler finance

You may be able to find the right product for you through your energy company as most of the major ones offer these loans, including:

  • British Gas
  • Southern Electric
  • E.ON

Direct from an installer

Heating and boiler installers are another good option and they offer the know-how to help you to choose the right product and finance package for you. 

Some of the major ones include:

  • Help-link
  • Boiler Plan UK
  • Swale Heating UK
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From your bank or other financial institution

Your bank or building society may be able to help you to fund your boiler by offering you a personal loan. 

You will pay this back in monthly instalments just as you would any other type of finance.

Most of the major UK banks and building societies will be able to offer you personal loans.

Pay for it on a credit card

Credit cards offer a more flexible option, allowing you to pay back up to or more than a set minimum repayment each month until the card is paid off.

Consider 0% interest purchase cards so that you can enjoy an interest-free period in order to pay back as much as possible.

From a boiler manufacturer

Many UK boiler manufacturers offer boiler finance schemes which provide monthly repayment plans to clients to suit a range of financial circumstances. 

You may be required to use a recommended installer to use these products – in other words, the only finance products they can sell are those of the manufacturers they’re accredited by.

Boiler manufacturers that offer finance schemes include:

  • Vaillant
  • Glow-worm
  • Ideal Boilers
  • Worcester-Bosch
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Do I have to take boiler finance?

There are two alternatives to using a boiler finance scheme. 

They are:

  • Paying the full cost of your new boiler and installation upfront.
  • The government’s free boiler scheme. 

The government’s free boiler scheme

Under this scheme, you apply for a free grant towards the cost of replacing your old boiler with a new, energy efficient one. 

You may be eligible if you are a homeowner, tenant or landlord, have a boiler that is more than 10 years old, and receive certain benefits.

Contact us to save up to 54% on your boiler quote from installers offering finance

Our free, no obligation service offers you an easy way to save up to 54% on the cost of buying and installing your new boiler. 

All you need to do is fill out the simple form on our website and you will be contacted by three or four local Gas Safe regulated engineers.

You’ll get a free quote and be able to compare and research the right products for you.

Find out how much money you could save on a new boiler with the right repayment plan for you with HomeSage

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Andy

Andy is one of the HomeSage founders and an occasional content contributor. His love for boilers is only just outweighed by his love for football.