Boilers - Repayments are too high

Based on resolver's experience to date, a number of factors can be attributed to repayments becoming too high.

If you obtained a loan to pay for your Boiler installation from a bank, building society, or as an advance on your mortgage – the interest rates are normally variable – and can fluctuate over time. This can lead to unexpectedly high repayments.

If the Boiler installation was provided as part of a Green Deal Plan, the higher repayments could have been caused by an incorrect assessment, changes in your behaviour (rebound effect) or the Boiler not being installed correctly.

Green Deal loan interest rates are fixed rather than variable. However, Green Deal Providers are allowed to increase the whole charge (the installments that you pay) by two per cent each year. If a Provider chooses to do this the level of the increase and the installments payable must be agreed and fixed from the outset.

The way the Green Deal differs from a standard loan is that you should not pay back more in loan repayments than you are saving on your energy bill. This system is known as the 'Golden Rule' - but the Golden Rule is not a guarantee, just a guideline based on energy-saving estimates. You'll therefore only make overall savings on your energy bill once you've made all your repayments. A Green Deal Provider must inform customers that: (a) savings estimates in the Green Deal Advice Report are not necessarily the exact savings which will be made on energy bills; and (b) whether these savings are actually achieved will be affected by: (i) the way that energy is used at the property; and (ii) the tariffs charged for energy supplied to the property.

If you’re on a pre-payment meter, the repayments for your Green Deal will be taken from the credit on your electricity meter in small amounts several times per day. Therefore, you may find that you need to top up your electricity meter more often than before.

If you feel that your repayments are too high, whether on a standard loan or Green Deal Plan, you should write a formal letter of complaint to the respective company. If they are unable to resolve your issue then you will be able to escalate, as a last resort, to the Ombudsman. They will act as an independent arbitrator to rule on any dispute between you and your provider.

Remember that this is a good time to check that you are on the best energy tariff for your needs using a price comparison website, so it’s a good idea to take some time to compare prices and switch providers if you find a better deal. As you are moving into a new home you may not have the full details for the energy use in the home so resolver recommends you ask the current owner/occupier for the energy usage via your solicitor or the estate agent.

Price comparison websites often have tools that help you estimate your energy usage and to help you make an informed decision.