Which loan should I take out to fund my renovation work?

Which loan should I take out to fund my renovation work?

Wondering which loan to take out to fund your renovations? Mulling over a renovation loan or more inclined to stick with your mortgage loan? We give you a choice of five options along with their benefits and drawbacks.

Option 1: renovation loan

If you're planning home improvements or renovations, a KBC Brussels Renovation Loan is the ideal solution. You borrow at an attractive rate which is fixed, so you repay the same amount each month. 

If you already have a mortgage loan, there are even more ways to get financing for your plans. Come in and talk to us today about what we can do for you.

You can take out a KBC Brussels Energy Loan if at least half of your home improvements are for energy-efficiency purposes or fire or burglar securing improvements. 

Benefits

  • Ability to work out and apply for your loan online
  • Quick to arrange
  • No security required apart from an assignment of wages if you fail to pay
  • No notary-public required

Drawbacks

  • Often comes at a higher rate of interest than a mortgage loan
  • Online applications only possible for loans of 50,000 euros or less
 

Option 2: energy loan

Ready to look to the future and live in an energy-efficient, well-secured home? Just send us proof of your investment1 and we’ll set things in motion for your KBC Brussels Energy Loan application. 

At least half of your investment must be for eco-friendly home improvements or enhancements that boost your home’s security or fire safety.

Benefits

  • Ability to work out and apply for your loan online
  • A great-value fixed interest rate
  • Can be topped up with extra grants and subsidies
  • Lower energy bills (because you have invested in energy-efficient measures)
  • A safer and more secure home

Drawbacks

  • Online applications only possible for loans of 50,000 euros or less
  • Invoice always needed as proof

Option 3: re-use your mortgage

Will you soon be done with paying off your home loan? Or have you recently paid it off? Now's a great time to plan your improvement works. Re-use your current mortgage for doing improvement works and you can get financial benefits. 

Benefits

  • Attractive terms
  • No new mortgage: if sufficient equity has been released, you don't need to apply for a new mortgage and you won't pay any additional notary-public's fees, just a loan origination fee
  • Tax breaks: a renovation loan is a new mortgage loan. When renovating an investment property or holiday home, the principal repayments may qualify for tax relief under a long-term savings scheme and/or the interest for standard interest relief

Drawbacks

  • If you take out a new mortgage loan, you pay a loan origination fee

Option 4: garden loan

The cost of landscaping a garden can quickly add up. With this in mind, KBC Brussels has a separate garden loan to help you realise your green-fingered dreams.

Benefits

  • Tailored to your needs
  • Attractive terms
  • Ability to work out and apply for your loan online

Drawbacks

  • Invoice always needed as proof

Option 5: loan for home interior improvements

Whether it's a new look for the interior of your home or a total makeover, we might just have the ideal financial solution for you in the form of our ‘Home Interior Loan’.

Benefits

  • Ability to work out and apply for your loan online
  • Opportunity to spread the cost
  • Fixed repayment schedule (you know exactly how much you have to pay and for how long)
  • No invoice needed as proof

Drawbacks

  • Higher rate of interest

Paying for renovations out of your own pocket

Using your own money to pay for renovation works is certainly an option, as you won't have to pay bank charges or interest. However, there are a number of drawbacks compared with borrowing. Even though you can afford to pay for the work yourself.

  • You lose some of your financial buffer
  • You miss out on income from savings and investments
  • You pass up potential tax breaks and benefits

Of course, the decision is entirely up to you. Consider the five options at your own leisure and discuss them with your loan expert.

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