Renovating a house costs a lot of money. Banks know this all too well: Most major banks have a renovation loan in their range. But what exactly does this type of loan mean? What then is the Flemish Government renovation loan ?
We will go deeper into the renovation loan and give you extra tips to save on your renovation.
Renovation loan: borrow for your renovation
A renovation loan is best comparable to an installment loan . She is also more flexible than a mortgage loan. A renovation loan does not require the intervention of the notary, no guarantees are requested and is usually easier to obtain than a mortgage loan.
In comparison with a mortgage loan, the interest rate will be higher with a renovation loan.
You also have the option of co-financing your renovations with a mortgage loan (for example, when purchasing or via a re-admission), but it comes down to estimating the costs in advance and choosing the cheapest option.
Do not forget the tax impact!
What to renovate?
A renovation loan must be used to finance renovations of your home . With a renovation loan you can perfectly renovate your bathroom, roofing, kitchen, … but you have to prove this at the bank.
Tip : take care in advance for a few quotations and bring them along during your loan application. Of course, other renovations are also eligible to finance with a renovation loan : the installation of a jacuzzi, the construction of a terrace, patio or veranda, the modernization of some rooms such as the kitchen, the installation of a heat pump or solar panels, etc … Tip : Request multiple quotations to compare prices, save up to 30% on your renovations.
Compare Renovation loans: Find the cheapest renovation loan
Virtually every major bank says they have advantageous renovation loans in their range. You still do well to compare renovation loans. That way you are sure that you really have the cheapest loan.
Tip: Compare various renovation loans below, and then contact the less interesting providers with the question whether they can go under the cheapest loan.
Interest rates are a snapshot. They are therefore purely informative and temporary, can undergo changes and / or be dependent on the loan amount.
Representative Example: Loan on payment of € 50,000.00; Term is 120 months . You pay € 516,02 monthly for a JKP of 4.50% . The total amount to be repaid is € 61,922.40. For an exact calculation, request an offer from the above parties.
Tip: always simulate loans on the bank’s site
Many sites offer a module where you can carry out a simulation. However, it is wiser to run this simulation directly on the credit institution’s website. Through the link below you can test such a simulation:
Simulate a renovation loan here at Cetelem
Renovation loan characteristics
As described above, a renovation loan is nothing more than an installment loan . This also means that the term and loan amount has already been determined in advance. The full amount will be credited to your account after signing the contract.
It is also important that no mortgage or collateral is required, and that an intervention by the notary is not required.
The interest you have to pay is determined before signing the contract and expressed in the Annual Cost Percentage ( APR ). You can use this to compare renovation loans and find the cheapest. See above also the quoted lenders to start.
The APR consists of administration costs, credit fees, any life insurance and the interest that will be used for the loan.
The repayment of the loan will be made by fixed, monthly repayments. These repayments include a part of the capital and a part of interest.
Renovation loan interesting?
Although a renovation loan will be slightly more expensive than a mortgage loan, it will still be cheaper than a normal installment loan . For this you must be able to meet a few conditions. After all, the bank wants to build in security in sufficient ways and guarantee that you can repay the sum.
We list the requirements that most banks propose for an interesting renovation loan. In the first instance you have to prove that the house is actually in your ownership. Proof that the loan is used to finance renovations is also necessary. Ask cheap quotations from different craftsmen for your renovation project here . Then you immediately have an idea of how much the cost price will be and a quote for the bank.
In addition to the above conditions, the bank will of course also check your general creditworthiness. For loan amounts above 1,000 euros, the credit institution is obliged to do this. You will also have to keep a wage document available and provide an overview of your current debt burden (although the bank can check this yourself easily).
Tip: some banks still offer a green loan . This then serves to make energy-efficient investments such as the placement of a solar water heater, solar panels, heat pump, etc … Read more about green loans here .
Renovation loan Flemish Government
Some people may qualify for a cheaper loan for renovations to their home. For example, it is possible for certain groups to lend at 0%. There are some conditions attached to this. We have already written about this in detail in this article about the Flemish Energy Loan .
Renovation loan and taxation
Loans that are entered into to purchase or maintain a home are tax deductible. This means that a normal renovation loan can also be introduced in the form of an installment loan, but only up to the amount of interest.
If the disc of your home tax deduction is already completely full, then it is of no use on fiscal terms to take out an extra mortgage loan. However, if your mortgage loan has already been repaid in part, you can opt for a re-admission or refinancing of your loan. Re-admission will in principle also be deductible if your current mortgage loan was also. However, file costs will be associated with a re-admission. Contact your bank for more information about this.
Tip: do not forget to check if you are also eligible for a tax discount or a renovation premium . This way you can save extra on the cost of your renovations.
Save on your renovation costs.
If you are going to renovate, you will soon lose a lot of euros. In addition to looking for a cheap renovation loan, it can also pay off to compare prices for your renovations. That is how it works:
- Visit this quotation service ;
- Choose the subject of your renovation project;
- Fill in the form;
- Receive up to 4 quotes per request. All offers are free and staying.
- Choose the most suitable contractor and save up to 30% on your renovation!
By requesting quotations you can save a lot of money in other words. All offers are free and without obligation to purchase. So you have nothing to lose.