Taking out a mortgage to renovate your home
If you want a bit more space at home but do not want to move, a renovation is an obvious choice. Of course, you need the funds for that. You could, for example, increase your existing mortgage to finance the renovation. We are happy to explain how this works.
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Responsible loans
At De Hypotheker, you take out a loan responsibly. This ensures a healthy financial situation
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Tailored advice
We take a detailed look at your personal situation and financial record. This allows us to recommend the mortgage that best suits your needs and expectations.
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More possibilities
We will review your mortgage right away. Is your mortgage still up to date? Perhaps you would like to make your home more sustainable at the same time?
Financing a renovation
A renovation can be quite costly. Do you not have that amount in your savings account? Fortunately, there are still options. For example, you can increase your mortgage for the renovation or take out an additional renovation mortgage.
Including your renovation in your mortgage
Are you buying a house and planning to renovate straight away? Then you can (partially) include the renovation costs in your mortgage. A valuation report can state the expected value of the property after the planned renovation. Based on this, you may be able to secure a higher mortgage to finance the renovation.
Taking out a second mortgage
With a second mortgage, you can increase your existing mortgage to finance the renovation. Essentially, you take out an additional renovation mortgage. Borrowing extra on your mortgage is usually done with the same bank or mortgage provider as your first mortgage. Taking out a second mortgage with a different bank is also possible in principle, although this can sometimes come with certain conditions.
Taking out a loan for a renovation
A revolving credit is a type of loan where you agree on a certain credit limit. If your balance is below this limit, you can withdraw the remaining amount. You only pay interest on the amount you have used.
Renovating your home: a step-by-step plan
How does financing a renovation actually work? We have outlined it for you in five steps.
Exploring your options
Before starting a renovation, it is important to explore your options thoroughly. Check whether permits are required for the renovation. Talk to different contractors and request quotes to get an idea of the costs. Consider how you want to cover these costs: (partially) using your savings, increasing your mortgage for the renovation, taking out an additional mortgage, or opting for a revolving credit.
Consulting with a mortgage adviser
Are you considering taking out an (additional) mortgage or refinancing your current mortgage to fund your renovation? A mortgage adviser can outline the possibilities and calculate your renovation mortgage. They will determine how much extra mortgage you can get and how this will affect your monthly payments. The first consultation at De Hypotheker is free of charge and without obligation.
Arranging your mortgage
The mortgage provider will present you with a mortgage offer, which you then sign. In some cases, your current mortgage already has a higher registered amount, meaning you will not need to visit a notary. If your loan does not fit within the existing mortgage registration, a second mortgage will be taken out, requiring a visit to the notary.
Signing the mortgage contract
Once the chosen mortgage provider approves all documents, you will receive the mortgage offer—the binding agreement. After signing the offer, you can start counting down to the day your mortgage is finalized.
Start renovating!
Once your mortgage is finalized, the borrowed amount will be deposited into your account. You can use this to pay the contractor's invoices. Note: mortgage interest deduction is only possible if the loan is used for renovating and/or improving your home.
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Frequently asked questions about renovating your house
What our clienst ask us
What is a construction fund?
The part of your mortgage intended for the renovation is set aside by the bank in a construction fund. You can send the contractor's invoices for the renovation to your mortgage provider, and these will be paid from the construction fund.
Which renovation works are subject to the 21% VAT rate?
This rate applies to all labor costs for renovation and repair work on homes older than two years. This includes renewing, expanding, repairing, or replacing parts of the house, garden construction and maintenance, and designing and creating construction drawings by an architectural firm.
Which renovation works are subject to the 9% VAT rate?
Painting, plastering, insulating, and wallpapering homes older than two years are subject to the 9% VAT rate.
What are the costs of increasing your mortgage?
Increasing your mortgage always comes with costs, as you are essentially taking out a new mortgage alongside your existing one. These costs may include fees for advice and mediation, notary services, and property valuation. Sometimes, it is more advantageous to take out a new mortgage for the entire amount, while other times, simply increasing your current mortgage is the better option. The advisers at De Hypotheker are happy to explain the costs of a renovation mortgage. We outline all expenses, calculate potential savings, and map out the financial impact for you.
What is a renovation mortgage?
A renovation mortgage is not a specific type of mortgage. It simply refers to the reason for taking out a mortgage, which is to finance a renovation. This could include installing a new kitchen or adding an extension to your home.
When can I apply for a renovation mortgage?
Whether you can get a renovation mortgage depends on the value of your home. The current value must be sufficient, or the renovation should add enough value to secure the mortgage. To prove this, you need a valuation report that states the market value of your home both before and after the renovation.
What are customers say about us
There is a lot to consider when taking out or refinancing a mortgage. That is why good and reliable mortgage advice is important. These customers are happy to share their experience with De Hypotheker.
