Halifax has partnered with Octopus Energy to pilot a scheme that gives mortgage borrowers access to cheaper heat pumps.

Under the scheme, heat pump installation costs could be lower than a gas boiler for many, as a combination of cashback and grants could bring the cost of air-source heat pumps down to just £2,000.

How does it work?

The new pilot scheme is available to Halifax customers who are using mortgage borrowing to finance the installation of a heat pump.

Under the bank’s Green Living Reward scheme, borrowers using a mortgage, remortgage, or further advance to finance their heat pump are eligible for £1,000 cashback on completion of the works.

This is in addition to the a £5,000 Boiler Upgrade Scheme grant available from the government.

In total, it reduces the typical installation cost from £8,000 to £2,000.

Andrew Asaam, homes director at Halifax, said: “Helping Britain live in better, warmer, more energy efficient homes is one of our key commitments.

By working with Octopus, we are giving our customers the opportunity to make the heat pump switch now by helping bring the cost in line with, or even cheaper than, that of a gas boiler.”

Rebecca Dibb-Simkin, chief product officer at Octopus Energy, added: “The pilot with Lloyds Banking Group comes at a crucial time for consumers facing a dual climate and cost of living crisis. It no longer needs to be a question of prioritising one over the other: heat pumps are greener than gas boilers, and thanks to Octopus, the government and Lloyds, they can be cheaper too.”