Will you turn your house into a dream house? A new kitchen, finally the other bathroom? An attic full of light and space with a dormer window? A conservatory to involve your garden in your living room? Or do you want to reduce your energy bill and at the same time contribute to the environment with solar panels? Whatever you are going to renovate at home, a renovation costs a lot of money. Arranging everything in one go is often cheaper, but it can also go quite well. That is why there are also possibilities to finance your renovation. Because financing costs money, it makes sense to delve into it thoroughly. CreditSaver has collected all information for you. You will also find various providers here where you can arrange your financing at favorable rates. That way you know for sure that you will work with a reliable party.
Opportunities to finance your renovation
There are various options for financing a renovation:
- Increase the mortgage
- Second mortgage
- Personal loan
- Revolving credit
Financing through the mortgage
If you want to increase your mortgage to finance your renovation or want to take out a second mortgage, it almost always goes through the bank. The interest you pay is usually lower than with a personal loan or revolving credit, but there are a lot of other costs involved. This way you pay costs for advice, valuation and the notary. These are considerable amounts so it makes sense to calculate whether a lower interest rate outweighs the high costs. In addition, many homes are ‘under water’. This means that the mortgage is higher than the value of the home. If that is the case, the mortgage lender will no longer want to borrow extra money on your mortgage.
Financing a renovation with a personal loan
If you only have a kitchen or a bathroom installed, you know in advance what the costs will be. Often you pay an all-in price including assembly and it is clear what the total amount is. So you also know what you need to finance your renovation. In that case you can opt for a personal loan. With this loan form you know in advance what it will cost to finance your renovation. There is a fixed interest rate and a fixed term. Because everything is already fixed, you can easily compare the different variants. There are several providers who offer a personal loan to finance your renovation. You can find this on CreditSaver.
Interest tax deductible
If a personal loan is used to finance a renovation, the interest is deductible. These tax benefits only apply to a personal loan and you must be able to prove that the loan was used to finance the renovation. You can deduct the interest up to 6 months after taking out the loan. You can find more information about this on the website of the Tax Authorities.
Lack of clarity about the total costs of the renovation
If you are going to renovate it is not always clear what the total costs will be. Especially with large-scale renovations it is not always clear what you will find and what additional costs will be added. In that case, a personal loan may not be sufficient. And how annoying it is when during the renovation it appears that the money has run out. Borrowing is not possible with a personal loan and taking out a new loan can therefore be difficult. And borrowing too much is also a shame because of course you pay interest on it, so you’re more expensive. If it is difficult to estimate in advance what the costs of a renovation will be, a revolving credit is a good choice.
The most flexible loan form: the revolving credit
With a revolving credit you get a maximum loan amount. You decide how much of it and when. The interest is variable, so it can change during the term of the loan, but you only pay on the amount that you actually withdraw. You pay repayment and interest on a monthly basis and you can withdraw the repaid amount. This form of financing is the most flexible. Especially with a large-scale renovation where you do not know what to expect, this is a good way of financing. It requires discipline to actually repay the revolving credit because otherwise the loan will continue to run for a very long time and it becomes an expensive affair. The same applies here, compare the various providers and their conditions carefully in order to arrive at the most advantageous loan.
Pay off without penalty
If you have a loan, you want to get rid of it as quickly as possible. Borrowing money costs money, and even though you pay off monthly, you continue to pay interest on the outstanding sum. And that interest is often fairly high. Repaying extra if you have received your holiday allowance or 13th month can therefore be pleasant. But not if there are high costs involved. If you want to pay off in the meantime, you have to pay close attention to whether you can repay without penalty. And if not, what the costs are. You can include this information in your choice of a lender.
Offer based on a consultation
At Geldshop.nl you can request a consultation. An adviser discusses your financial situation and your wishes and needs with you and based on that your borrowing needs are mapped. You will then receive an offer for your specific situation. Comparing themselves is then no longer necessary, they do that for you. Nice, because then you know for sure that you can finance your renovation in the most advantageous way. You can also directly request a personal loan or revolving credit here . You can read here how to apply for a loan and what information you need for this.