Which loan should I choose for my renovation?

Which loan should I choose for my renovation?

Option 1: renovation loan

Advantages

  • Work out and apply for your loan online
  • Quick to arrange
  • No guarantees required apart from the assignment of wages if you fail to pay
  • No notary-required required

Disadvantages

  • Often a slightly higher rate compared with a mortgage loan
  • Online applications only possible up to 50,000 euros

 

Option 2: re-use your mortgage

You can also re-use your existing mortgage for your improvements.  Important: you need to have already repaid part of your current mortgage loan and have sufficient repayment capacity to borrow an additional amount.

How does it work?

If your monthly home loan repayments are fixed, to begin with a large portion will represent interest and a small portion capital. As time progresses, the interest portion reduces and the capital portion increases. By re-using your mortgage, you can apply the released capital portion for financing renovations.

Advantages

  • Attractive terms
  • No new mortgage: if sufficient capital has been released, you don't need to apply for a new mortgage and you won't pay any additional notary-public's fees. You'll only therefore pay the loan origination fee
  • Tax breaks: a renovation loan is a new mortgage loan. Your monthly repayments (capital and interest) are tax-deductible if your loan term is longer than ten years 
 

Disadvantages

  • The credit amount you can borrow depends on your repayment capacity.

Option 3: green energy loan

Do your improvements also involve an energy-saving investment? If so, a green energy loan could be right for you. For this, you will need to submit an invoice or proof of investment. A Green Energy Loan from KBC offers favourable terms if at least 50% of the improvements consist of energy-saving investments. Examples: replacing your boiler, high-efficiency glazing, solar boilers, new roof insulation and even energy audits. 

Tip

For some municipalities, you may qualify for an additional energy loan. The terms may vary from municipality to municipality.

Advantages

  • Work out and apply for your loan online
  • A great-value fixed interest rate
  • Can be topped up with extra bonuses and grants
  • Lower energy bills: because you have invested in energy-efficient measures

Disadvantages

  • Online applications only possible up to 50 000 euros
  • Invoice always needed as proof

Option 4: loan for a new interior design

Want a new you look for the interior of your home? Or perhaps a total makeover? Your bank might offer a loan on attractive terms for this. Such as the 'Home Interior Loan'.

Advantages

  • Work out and apply for your loan online
  • Spread the cost
  • Fixed repayment plan: you know exactly how much you have to pay and for how long
  • No invoice needed as proof
  • Higher rate

Option 5: garden loan

Transforming a garden can cost a lot of money. This is why KBC offers a separate garden loan. You can make your dream garden a reality.

Advantages

  • Make your wishes come true
  • Attractive terms
  • Work out and apply for your loan online
  • Invoice always needed as proof

What if you can finance your improvements yourself?

Financing your renovation work yourself is certainly an option. In that case you pay no charges or interest. However, there are a number of disadvantages compared with borrowing.

  • Even if you can afford it. You lose some of your financial buffer 
  • You miss out on income from savings and investments
  • You forego potential tax benefits Of course, the decision is entirely up to you. 

Consider the six options and speak to your expert about it.

Attention, borrowing money also costs money

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