Your Guide to Boiler Finance

Boiler finance is a convenient way to cover the cost of getting a replacement boiler if you don’t have the money to buy a brand-new boiler outright. While a new boiler can lower your energy bills in the long term, boilers can cost a substantial amount of money, typically between £1,500 and £3,000. But with boiler finance, you can spread the cost of a new boiler over two, five or even ten years, with a wide range of boiler finance products. 

If you think boiler finance is the right solution for you, you’ll find plenty of options available. Here we will explore how boiler finance works and some of the most common types of boiler finance available.

How does boiler finance work?

Boiler finance is a credit agreement that enables you to spread the cost across manageable monthly payments rather than paying the cost of a new boiler all at once. Most boiler schemes will require you to pay a deposit and interest on the amount you borrow. However, this will depend on the product and lender you choose. It’s worth keeping in mind that the lower the monthly repayment, the longer it will take you to pay off your boiler finance. Therefore, putting down a good-sized deposit first will help you reduce the length of your payments. 

Just as with any loan, taking out boiler finance is a risk. Failing to keep up with your payments will likely impact your credit rating and getting more credit in the future. Before applying for boiler finance, consider how much you can afford to pay in repayments each month and in terms of how quickly you can pay off the finance.

Finance options for a new boiler

There are many ways you can spread the cost of a new boiler with finance, including buy now, pay later and interest-free options.

Interest-free

Interest-free boiler finance means you can spread the cost of a new boiler at no extra cost. However, no interest boiler finance is not available for everyone, just for those with a good credit rating. The repayment period on this type of finance is usually capped at two years, so your monthly repayments will tend to be higher than if boiler finance with interest.

Buy now, pay later

Some finance options allow you to defer payment, usually for 12 months. This means that you don’t have to pay anything for the first 12 months after taking out the finance. In many cases, if you pay off the loan in full within the initial 12-month period, you won’t have to pay any interest. However, if you don’t pay it off during that time and let it roll into the interesting bearing period, the interest is usually backdated to the begging of the loan period and spread over the subsequent repayment period. Interest rates are also usually higher.

Interest bearing

With interest-bearing boiler finance, you will pay an interest rate on top of the loan. More interest-bearing loans don’t require a deposit and run from three to ten years, allowing you to spread the costs for longer and a cheaper monthly repayment. You will need to use an FCA-registered heating company to install your new boiler with this type of finance. You will also need a good credit history and be prepared to pay an additional amount on top of the cost of installation.

Boiler Pay monthly service

If you want to avoid paying a large amount upfront for a new boiler, a pay monthly subscription could be the ideal solution for you. This type of boiler finance covers the cost of your new boiler, installation, maintenance, repairs, callouts, annual gas safety check and annual servicing. This is covered by a set monthly fee, usually over 12 years.

If you want to own your boiler outright and can cover maintenance and repair costs, then one of the flexible boiler finance options might be the right solution for you. However, if you want peace of mind that everything is covered, from the cost of the boiler to its annual servicing, a monthly pay service may suit you better. Whichever boiler finance option you choose, it’s essential that you keep your boiler working safely and efficiently with regular maintenance and an annual service from a Gas Safe registered engineer. 

To book your boiler for a service with Osprey Plumbing & Heating or to find out about our boiler finance deals, contact us today at 01843627057.