Refurbishment loan: how to finance the work, with or without a mortgage?
A refurbishment fixes damage and defects and is rarely small. Work out the rate, check funding and compare whether an instalment loan or a mortgage-backed loan fits better.
What is a refurbishment loan?
A refurbishment loan finances the repair of damage or defects in a property, such as damp, faulty pipework, roof or façade. It can run as an instalment loan without a land registry entry or as a mortgage-backed loan. For larger amounts the mortgage-backed route is often cheaper.
Non-binding guide using an annuity rate and a fixed interest rate. The actual offer depends on creditworthiness, amount and term; the effective rate in the offer is what counts.
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Refurbishment, renovation, modernisation: what is the difference?
A refurbishment removes damage and defects, a renovation freshens up, a modernisation lifts the standard.
For financing the amount and eligibility for funding matter more than the term: energy-efficiency refurbishments can be funded, pure repair work usually cannot.
Instalment loan or mortgage: what fits the amount?
Up to about €50,000 an instalment loan is usual; above that a top-up or mortgage-backed loan is worth comparing.
Mortgage-backed loans usually have the lower rate but need a notary and land registry entry.
Check funding before you commission work
For energy-efficiency refurbishment, funding can ease financing considerably.
Many programmes require the application before work starts. See KfW programmes.
Frequently asked questions
How large can the amount be?
As an instalment loan usually up to around €50,000, with a mortgage considerably more.
Can I finance purchase and refurbishment together?
Yes, often as a mortgage with a modernisation share.
Is refurbishment funded?
Energy-efficiency measures can be funded; conditions depend on the programme.
What if costs rise?
Plan a buffer or clarify early whether a top-up is possible.
Any questions on this topic?
A first consultation is free and without obligation — the commission is, as a rule, paid by the bank. We tell you what this means for your own financing.
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Editorially responsible: Olga Nikushkina — owner, §34i GewO (German mortgage brokerage), adviser register D-W-132-ZUCB-95. Specialised in German property financing with an international dimension: non-residents, foreign-currency income, cross-border workers, expats. Siegfried Perini is entered in the German intermediary register under this licence as a person directly involved in brokerage and advice (§ 11a GewO), active in real estate since 1992. Not legal or tax advice.