Financial Planning

Financing vs Cash Calculator

See the extra cost of borrowing, then compare any interest on money you keep in the bank.

This compares how you pay for the same installation. Energy-bill savings are the same either way. The first comparison shows actual payments. Bank interest is a separate scenario below. Starting loan figures are illustrative, not a lender offer.

1. Installation and loan
Use the same installed price for cash and finance.
This reduces the amount borrowed.
84 months is 7 years.
Use a fixed monthly repayment for the full term, with no balloon or separate final payment. A quote takes priority over the estimate below.
Used only if the quoted payment is blank. APR can include fees: if you only have APR, use the lender’s monthly payment.
Do not repeat a fee already included in the quoted repayments.

2. Which option leaves you with more?

Enter your savings rate and tax to compare what you would have in the bank at the end of the loan. Use 0% for savings with no interest.

An assumed constant return, not a guaranteed rate.
Use 0 for tax-free interest. If only some interest is taxable, enter the average tax percentage across all the interest.

Same cash and monthly budget: the cash buyer saves the amount the borrower pays each month. The borrower keeps the remaining cash in the bank and pays the loan from regular income.

How the comparison works

  1. Amount borrowed = installation price minus the finance deposit. A quoted monthly payment overrides the rate-based estimate.
  2. Finance payments include the deposit, any separately paid fee and all monthly repayments. Fees already within a quote must not be entered again.
  3. Both bank scenarios start with the installation price plus any separate finance fee. After paying cash, the cash buyer banks the unused fee allowance and adds the monthly loan-payment amount. The borrower banks the remaining loan amount and makes repayments from income.
  4. The assumed after-tax annual bank rate is AER × (1 − effective tax fraction), compounded monthly. Both bank balances are compared on the same final date. No energy-bill savings are included because both routes buy the same system.

This assumes a fixed-rate loan with equal monthly payments. Balloon payments, staged funding, variable rates and early repayments need a tailored calculation. The lender’s quoted total takes precedence over estimates.

MoneyHelper: comparing loan rates, fees and repayments · Warm Homes scheme and lender guide