Municipal Home Energy Loans in Ontario: How Property Tax Loans Work

A municipal home energy loan in Ontario is a low-interest loan from your city or town for energy upgrades, repaid as a charge on your property tax bill over several years. Some Ontario municipalities offer these through a tool called a local improvement charge (LIC); well-known examples include Toronto's Home Energy Loan Program and Ottawa's Better Homes Loan Program. Availability, interest rates and eligible upgrades change, so always confirm current terms directly with your municipality.

With the federal Canada Greener Homes Loan closed to new applications since fall 2025, municipal programs are one of the few public financing options left for Ontario homeowners. This guide explains how they work, what to ask, and when they make sense.

How do municipal home energy loans work in Ontario?

Ontario municipalities can use local improvement charges to finance work on private property, including energy and water efficiency upgrades, and recover the cost through the property tax roll. The general structure looks like this:

Apply to the municipal program, often after a pre-retrofit home energy assessment.
Get approval for specific eligible upgrades and a funding amount.
Complete the work with your chosen contractors, following program rules.
Receive funds as a reimbursement or progress payment, depending on the program.
Repay through an added charge on your property tax bill over a fixed term (commonly between 5 and 20 years, depending on the program).

Because the charge is attached to the property, it has a special status similar to property taxes. That makes the loan low-risk for the municipality and allows lower interest rates than many consumer loans.

Note: We do not list current interest rates or loan limits because they change. Check your municipality's website or call 311 or the municipal information line for current terms.

Which Ontario municipalities offer home energy loans?

Program availability varies over time. Examples that have operated:

Municipality	Program	Where to check
Toronto	Home Energy Loan Program (HELP)	City of Toronto website; see our Toronto energy page
Ottawa	Better Homes Loan Program	City of Ottawa website; see our Ottawa energy page
Other municipalities	Some have run or are developing similar programs	Search your municipality's website for "home energy loan" or "local improvement charge"

If your municipality does not offer a loan, ask whether one is planned. Several Ontario communities have explored LIC programs, sometimes in partnership with local non-profits or climate organizations.

What can a municipal energy loan pay for?

Eligible upgrades are set by each program and can change. Commonly included measures in programs of this kind:

air-source or ground-source heat pumps;
insulation (attic, walls, basement) and air sealing;
windows and doors;
heat pump water heaters and drain water heat recovery;
in some programs, solar panels, battery storage or EV-related electrical work.

Many programs require a home energy assessment before and after the work to confirm the upgrades and measure results. If you are also applying to the Home Renovation Savings Program's assessment stream, ask whether one assessment can satisfy both. Our home energy assessment guide explains the process.

Pros and cons of property tax energy loans

Pros	Cons
Interest rates are often lower than unsecured loans	Availability and intake windows are limited
Long terms keep annual payments manageable	Paperwork and approval steps take time
Repayment is simple, on your property tax bill	Some programs require mortgage lender consent
The charge stays with the property if you sell (subject to buyer and lender terms)	Buyers, lawyers or lenders may ask for it to be paid out on sale
Can be combined with rebates	Not everything is eligible; contractor and documentation rules apply

What happens if you sell your home?

Because the charge is attached to the property, it can in principle transfer to the next owner, who continues the payments. In practice, a buyer's lawyer or mortgage lender may ask for the balance to be paid off on closing, or the buyer may negotiate a price adjustment. Tell your real estate agent and lawyer about any LIC early. Check whether your program allows early repayment without penalty.

Do you need your mortgage lender's permission?

Some programs require written consent from your mortgage lender, because the LIC has priority status similar to property taxes. Start that conversation early; lender responses can take time.

Combining municipal loans with rebates

Municipal loans are financing, not rebates. They can work well alongside provincial incentives:

The Home Renovation Savings Program, delivered jointly by Save on Energy and Enbridge Gas, has offered rebates for heat pumps, insulation, windows and other measures. Rebates are paid after the work is complete and verified, so a loan can bridge the gap. See our HRS program guide.
Some municipal programs have their own grants or require the loan amount to be reduced by any rebates received. Ask how rebates are treated.
Make sure you meet the separate rules for each program, including pre-approval and deadline requirements. Our guide to stacking rebates covers common conflicts.

Caution: HRS heat pump rebates require a participating contractor and pre-installation approval before work starts. Do not let a loan timeline push you into starting work before your rebate is approved.

Questions to ask before you apply

Is the program currently accepting applications, and when does intake close?
What is the current interest rate, and is it fixed for the full term?
What are the minimum and maximum loan amounts, and the available terms?
Which upgrades are eligible, and are there contractor requirements?
Is an energy assessment required, and who pays for it?
Is mortgage lender consent required?
Are there fees for applying, administering or registering the charge?
Can I repay early, and is there a penalty?
How are rebates from other programs treated?
What happens to the loan if I sell?

Is a municipal energy loan right for you?

It tends to make sense if you:

plan major upgrades such as a heat pump plus insulation that you cannot pay for upfront;
want a lower rate than personal loans or installer financing;
expect to stay in the home for several years;
live in a municipality with an active program.

It may not be the best fit if the project is small enough for savings, if you already have a low-rate home equity line, or if you plan to sell soon. Compare all options in our guide to financing home energy upgrades, and use our rebate finder to see which incentives apply to you.

Frequently asked questions

Does a municipal energy loan affect my credit score?

Because repayment is through your property tax bill, it typically does not appear as a consumer loan in the same way. Missing property tax payments has serious consequences, however. Ask your municipality how the loan is reported.

Can renters use municipal energy loans?

No. These loans are attached to the property, so only property owners can apply. Tenants can look at the options in our renters and condo energy guide.

Can I use a municipal loan for a condo?

Programs generally target low-rise homes owned by the applicant. Condo units are often excluded or treated differently; check with your municipality.

Are there municipal grants as well as loans?

Some municipalities offer small grants or incentives alongside loans from time to time. Check your municipality's website and our Ontario rebates directory.