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Exploring my options: advanced questions

Can I include modernisation or renovation costs into the mortgage?

A differentiation must be made here between modernization costs and renovation costs.

Modernization costs Yes, modernization costs can be included in the financing as long as they increase the value of the property. Modernization includes, for example, new windows, bathrooms, electrical, heating, or plumbing.

Renovation costs Renovation costs, on the other hand, must be paid out of equity. The renovation includes new flooring or painting.

Movable assets are also not considered to increase in value and must therefore be covered from savings. This includes a new kitchen, for example.


You want to buy a property of 300.000 € but it requires 30.000 € worth of modernization and 20.000 € in renovation costs. You have 80.000 € worth of savings to cover the fees and use as a down payment. Given 15,00 % fees, the total loan amount required is:

(300.000 € * 115 %) + 20.000 € + 30.000 € = 395.000 €
- 80.000 €
= 315.000 €

The bank will then extend a loan of 315,000€ at a value of 330,000€, implying a loan-to-value of 95.00%. So as you see, you can add the modernization into the loan as it increases the value of the property, whereas renovation costs require additional equity.

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