Can you finance a heat pump? Seven ways to pay.
A whole-home heat pump runs roughly $14,000 to $25,000 before incentives, and the federal tax credit is gone for 2026 installs. Here is every way to cover it, ordered from the cheapest money to the most expensive.
Start with the real price, not the monthly payment
Contractor financing is sold as a monthly payment. Work backward from the installed price instead, because that is the number interest gets charged on.
A whole-home ducted heat pump runs roughly $14,000 to $25,000 before incentives, depending on home size and climate. That range is wide because the underlying sources disagree, and we would rather show you the disagreement than average it away. EnergySage marketplace data puts the average ducted install at $14,529 (the all-type whole-home average is $15,393), with state extremes running from about $8,000 in New Mexico to about $33,000 in New York. Rewiring America is higher: a median of $19,500 for a 1,500 to 2,500 square foot home, $25,000 for 2,500 to 5,500 square feet, and $29,000 above 5,500 square feet.
Both are honest numbers measuring different things. Marketplace averages skew toward simpler jobs in competitive markets. Modeled medians assume a full heating-load replacement. Where your house lands depends on four drivers: climate, labor market, whether your existing ductwork is usable, and whether the job needs electrical work. New ductwork alone adds $2,000 on a small home and $10,000 or more on a full retrofit.
Ductless changes the math. Here are the bands worth planning against:
Before incentives, depending on home size and climate. Low end: moderate climate, tight home, usable existing ductwork, competitive contractor market. High end: cold climate, high-labor metro, electrical work, ductwork.
Rewiring America band, median $6,600. Angi and HomeAdvisor report $2,000–$6,000 with most spending about $3,000. For a heating retrofit (not a spot-cooling add-on) the higher band is the safer anchor.
Roughly $2,000–$7,000 per zone. Zone count is the single biggest cost driver, so the head count on your quote moves the number more than the brand does.
Two practical moves before you talk to any lender. First, get the installed-cost detail for your own scope in the heat pump installation cost guide, and run your house through the heat pump cost calculator. Second, subtract every rebate you qualify for before you decide how much to borrow. Financing $14,000 instead of $19,000 changes the payment more than shopping for a better rate will.
And if you are still deciding whether the project earns its keep at all, that is a separate question from how to pay for it. The payback case, by fuel type and climate, is in are heat pumps worth it in 2026.
Cheapest money first
Work down this list in order. Every dollar you take from a higher line is a dollar you do not borrow at a worse rate on a lower one.
Rebates and incentives you do not pay back
What it is State, utility, and (where a program has actually launched) federally funded rebates. Some come off the installed price at the point of sale, some arrive as a check weeks after the work passes inspection.
What it costs you Nothing. This is the only money on this list with no interest, no fees, and no payments.
Who it fits Everyone, first, before you talk to a lender. A rebate applied before financing shrinks the amount you borrow, which cuts the interest you pay on every month that follows.
0% and low-interest state energy loans
What it is State energy offices, green banks, and efficiency utilities run their own lending programs at rates no private lender matches. Massachusetts, Maine, Connecticut, New Jersey, Pennsylvania, Delaware, Nebraska, and Vermont all have one (terms in section 03).
What it costs you 0% to about 8% APR, typically unsecured, typically 5 to 15 years. A few carry an origination fee instead of interest.
Who it fits Almost anyone in a state that has a program. The catch is usually a contractor requirement (the work has to be done by a registered or participating vendor) and a credit floor.
Utility on-bill financing
What it is Your utility pays the contractor and you repay through a line item on your monthly bill. No separate loan servicer, no separate due date. Tacoma Power in Washington is the clearest example we have verified terms for.
What it costs you Often 0%, and repayment rides on a bill you already pay. Pre-approval and a participating contractor are usually required.
Who it fits Homeowners in a utility territory that offers it. Ask your utility directly, because on-bill programs are rarely advertised well and often run out of funding mid-year.
Home equity (HELOC or home equity loan)
What it is Borrowing against the equity you already have. A home equity loan is a lump sum at a fixed rate; a HELOC is a revolving line you draw on, usually at a variable rate.
What it costs you The lowest rates in private lending, because the loan is secured by your house. Closing costs and an appraisal are common. Terms run long, often 10 to 20 years.
Who it fits Homeowners with real equity who are doing more than one measure, or who want one loan to cover a heat pump plus insulation plus a panel. The tradeoff is real: your house is the collateral.
Contractor or dealer financing
What it is An offer arranged by the installer through a third-party finance company. It shows up on the quote as a monthly payment rather than a price.
What it costs you Ranges from genuine promotional 0% (manufacturer-subsidized, for a fixed number of months) to double-digit APR. Promotional deals often carry deferred interest, which back-bills the whole interest charge if you miss the payoff window.
Who it fits Emergency replacements and homeowners who want one signature. Ask for the APR, the term, the fee, and the total of payments in writing before you sign.
Personal loan
What it is An unsecured installment loan from a bank, credit union, or online lender. Fixed rate, fixed term, no lien on the house.
What it costs you Higher than home equity because nothing secures it. Origination fees are common. Credit unions usually price below banks.
Who it fits Homeowners without equity, or who want to keep the house out of it, and who did not find a state program. Shop at least three offers: unsecured pricing varies more than any other category here.
Credit card, as a last resort
What it is Putting some or all of the job on a card, sometimes on a promotional 0% purchase window.
What it costs you The most expensive money on this page once a promotional window closes. Revolving rates are not close to any other option here.
Who it fits Bridging a rebate you are confident is coming, or covering a small remainder after other financing. Not a plan for a five-figure balance.
A note on names. State and utility programs get named here with their terms. Private financing gets described by category only, because rates move weekly and a lender name is not advice.
Two of the seven deserve their own page. Home equity is the biggest decision on the list, because the loan is secured by your house and the HELOC-versus-lump-sum choice changes both your rate risk and your closing costs: that comparison is in HELOC vs. home equity loan for energy upgrades. Contractor and dealer financing is the most oversold, because it arrives inside a sales conversation with the price hidden behind a monthly payment: how it works, and what deferred interest actually does, is in HVAC financing explained.
One more sequencing point that saves people real money: rebates from different sources can often be combined, but the rules about which ones stack are program-specific and unforgiving. Read rebate stacking before you assume a state rebate and a utility rebate both land on the same job. And if your project is bigger than the heat pump, the full funding picture across insulation, air sealing, water heating, and panels is in how to pay for home energy upgrades.
Verified state and utility loan programs
These are the programs we have confirmed terms for, with the date we checked. Rates and funding change without notice, so confirm with the administrator before you plan around a number.
| State | Program | Terms | Constraint | Verified |
|---|---|---|---|---|
| Massachusetts | Mass Save HEAT Loan | 0% interest, up to $25,000 | The $25,000 is a lifetime maximum per customer, not per project. | 2026-07-15 |
| Maine | Efficiency Maine Home Energy Loans | 1-year 0% APR up to $25,000 with a $500 origination fee; 5-year 5.99% APR up to $25,000, no fees; 10-year 7.99% APR up to $25,000, no fees; income-based 10-year 5.99% APR up to $7,500 | Unsecured, no property lien. Standard underwriting: minimum FICO 620, max DTI 55%. Income-based: FICO 580, DTI 70%. Work must be done by an Efficiency Maine Registered Vendor. | 2026-07-15 |
| Connecticut | Connecticut Green Bank Smart-E Loan | 6.99% APR (5, 7, and 10-year), 7.49% (12-year), 7.99% (15-year); max $50,000 | The heat pump special offer of 0.99% APR (5 and 7-year, up to $25,000) and 2.99% (10-year, up to $30,000) ran April 1 to July 31, 2026 and has ended. A 1.99% 5-year successor offer was announced. Confirm the current rate with the administrator. | 2026-07-15 |
| New Hampshire | Home Energy Performance (HEP) financing through the utilities | 2% APR unsecured, $1,000–$15,000, terms up to 7 years on loans of $12,001–$15,000 | Described as valid for a limited time while funding is available. Confirm before you count on it. | 2026-07-11 |
| New Jersey | NJ Clean Energy Whole Home program financing | $25,000 at 0% over 10 years, or $10,000 at 0% over 7 years | No income requirement for the program itself, but the 0% financing runs a credit check. | 2026-07-11 |
| Pennsylvania | KEEP Home Energy Loan (administered under PEDA and DEP) | $2,500–$25,000, below-market interest, 36 to 120-month terms | Reduced rates took effect 7/1/2025. | 2026-07-11 |
| Delaware | Energize Delaware Loan Program | Up to $50,000 for efficiency upgrades | Measure eligibility is set by the program, so confirm your scope qualifies before you apply. | 2026-07-11 |
| Nebraska | Dollar and Energy Saving Loans (Nebraska DWEE) | Low-interest, delivered through utility lending partners: roughly 1.5% through NPPD and 3% through OPPD per the DWEE loan page | This is a loan, not a rebate. Your lending partner depends on your utility. | 2026-07-11 |
| Washington (Tacoma Power only) | Tacoma Power on-bill loans | 0% for 7 years: heat pump up to $20,000, insulation up to $10,000; heat pump water heater 5-year up to $5,000 | Utility program, not statewide. Pre-approval required, and a Tacoma Power Participating Contractor is required except for a DIY water heater. | 2026-07-11 |
| Vermont | Efficiency Vermont Home Energy Loan | Low-interest, starting at 0% for income-qualified households | We are not publishing a borrowing cap for this one: the figure in circulation has not been re-verified with the administrator. Ask Efficiency Vermont for the current maximum. | 2026-07-15 |
A few patterns worth reading out of that table. Massachusetts and New Jersey are the two clearest 0% offers at real project scale, and both cap around $25,000. Maine trades interest for structure: its one-year loan is 0% but carries a $500 origination fee, while the longer terms carry interest and no fees, so the cheaper option depends entirely on how fast you can repay. Connecticut is the cautionary tale on timing, because a genuinely excellent 0.99% heat pump offer opened and closed inside four months of 2026.
Several other states run lending programs whose current terms we have not verified. We will name them and stop there rather than publish a number we cannot stand behind:
Michigan Saves
Michigan's residential energy green bank runs a lending program for efficiency work. We have not verified its current rates or caps, so we are not publishing any. Start at the program and your state page.
Nevada Clean Energy Fund
Nevada's green bank offers financing for home energy work. Terms unverified on our end, so confirm rate, term, and cap directly.
Carolina SURE (Clean Energy Fund of the Carolinas)
A consumer loan program for North Carolina that launched in July 2025. We have not verified terms, so treat any number you see elsewhere as unconfirmed.
Home Energy Loan Program (Center for Energy and Environment, Minnesota)
Minnesota's long-running nonprofit lender for efficiency retrofits. Amounts unverified here, so get them from the administrator.
Me2, Milwaukee, Wisconsin
A city program that is financing-only as of mid-2026: the city page states it is not offering free energy assessments or bonus incentives at this time.
The full list, including programs that did not fit this page, is in state energy efficiency loans. To see the loans, rebates, and utility programs that apply where you actually live, start at your state page.
The federal money moved, and not in your favor
Most heat pump financing advice online was written before these changes. If a page still promises you a federal credit, it is out of date.
The federal 25C credit expired
The Energy Efficient Home Improvement Credit (25C) was terminated for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act (OBBB, Public Law 119-21, signed July 4, 2025). It originally ran through 2032 under the IRA; OBBB pulled the sunset forward. If a quote, an ad, or a salesperson tells you a federal heat pump credit will offset your 2026 install, that is wrong.
The date that matters is placed in service, not purchase
The IRS uses the placed-in-service date, meaning installed and operational. Equipment bought in 2025 but installed in 2026 does not qualify. A system placed in service on or before December 31, 2025 is still claimed on the 2025 return, filed in 2026, on IRS Form 5695. That is the last filing season for it.
The residential clean energy credit (25D) expired too
25D ended for expenditures made after December 31, 2025, also under OBBB. It matters here only because homeowners routinely mix it up with 25C. Geothermal heat pumps were its one HVAC-adjacent measure.
HEAR no longer covers fuel switching
Under DOE Program Notice 26-2, dated May 29, 2026 (announced June 1, 2026, verified July 15, 2026), federally funded HEAR rebates are no longer available for replacing a gas, oil, or propane appliance with an electric one. Heat pumps qualify only for new construction or for replacing existing electric equipment. If you heat with fossil fuel today, do not assume a HEAR heat pump rebate covers your conversion.
Insulation and air sealing come first
The same notice requires insulation and air sealing upgrades before appliance rebates. That is the sequence good contractors already recommend, and it is now a condition of the money. States already paying under the old rules have roughly three months to amend, putting the deadline around the end of August or early September 2026.
A federal allocation is not a rebate
Money allocated to your state is not money available to you. Each state has to file a State Implementation Blueprint, get DOE approval, then launch its own program. Plenty of states have an allocation and no consumer program. Check your state page before you build a budget around federal rebate dollars.
What this means for a financing decision: the gap the federal credit used to fill now has to come from state and utility programs, or from the loan. That makes section 03 more important than it was a year ago, and it makes the order of operations in section 02 the difference between a comfortable payment and a stretched one. The detail on the expired credit is in the heat pump tax credit expired, and the current state of federally funded rebate programs is in home energy rebates in 2026.
Find out what is still available where you live.
The federal credit is gone, but state and utility programs are not. The Rebate Matcher checks your ZIP against the programs we track, so you know what to subtract before you decide how much to borrow.
Run the Rebate MatcherHeat pump financing questions
Can you finance a heat pump with no money down?
Often, yes. Several state energy loan programs finance the full project cost with no down payment: Massachusetts Mass Save offers a 0% HEAT Loan up to $25,000 (a lifetime maximum per customer, verified July 15, 2026), and New Jersey's Whole Home program offers $25,000 at 0% over 10 years (verified July 11, 2026). Utility on-bill programs like Tacoma Power's 0% seven-year loan also work with no money down but require pre-approval and a participating contractor. Contractor financing frequently advertises no money down as well, usually at a much higher rate than a state program.
Is there still a federal heat pump tax credit in 2026?
No. The 25C Energy Efficient Home Improvement Credit was terminated for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act (Public Law 119-21). A system placed in service on or before December 31, 2025 can still be claimed on the 2025 return filed in 2026, using IRS Form 5695. A 2026 install does not qualify, even if you bought the equipment in 2025, because the IRS uses the placed-in-service date.
What credit score do you need to finance a heat pump?
It depends on the lender, and state programs publish their floors. Efficiency Maine's Home Energy Loans use a minimum FICO of 620 with a maximum debt-to-income ratio of 55% for standard underwriting, and a FICO of 580 with a DTI of 70% for the income-based option (verified July 15, 2026). Those are among the more accessible thresholds available. Secured borrowing against home equity weighs equity heavily alongside score, and unsecured personal loans price almost entirely off score, which is why the same borrower can see wildly different offers.
Does financing a heat pump kill your rebate eligibility?
Generally no. Rebates attach to the equipment, the installer, and the household, not to how you paid. What does cause trouble is sequencing: a rebate applied at the point of sale reduces the amount you finance, while a rebate that arrives later means you borrowed the full price and pay interest on money you eventually get back. Some state loans are also built to work with the state's own rebates, and a few require a registered or participating contractor for both. Confirm the rebate rules before you sign the loan, not after.
Is a heat pump worth financing?
It depends on what you are replacing and what you pay for fuel. Financing a heat pump borrows against future operating savings, so the honest test is whether the monthly payment plus the new electric bill beats the fuel bill you have now. That math is strongest when you are replacing electric resistance heat or expensive delivered fuel, and weakest when you have cheap natural gas and a furnace with years left. Do the envelope work first: a tighter house needs a smaller system, which means borrowing less.
More money guides
How to pay for home energy upgrades
The whole-project version of this page: every funding source for insulation, air sealing, water heaters, and panels, ordered cheapest money first.
HELOC vs. home equity loan
Fixed lump sum or revolving line, closing costs, and which one fits a multi-measure retrofit better.
HVAC financing explained
How contractor and dealer financing actually works, what deferred interest does, and the numbers to ask for before you sign.
State energy efficiency loans
The full list of state and utility lending programs, with terms and verified dates.
Rebate stacking
How to combine state, utility, and manufacturer money on one project without disqualifying yourself.
Are heat pumps worth it in 2026?
The payback question with the federal credit gone, by fuel type and climate.
Get the real price before you pick a payment.
Financing decisions get easier once you have quotes in hand from installers who work in your area. Tell us about your house and we will line up heat pump quotes you can compare side by side.
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