Can I include modernisation or renovation costs into the mortgage?

Yes, you can include the modernisation costs into the mortgage as long as they increase the value of the property. Renovation costs on the other hand must be paid out of your own equity. Banks differentiate between renovation and modernisation. Modernisation is for example new windows, bathroom, electric, heating or pipelines. Renovation is for example flooring, or painting. All moveable assets are also not considered to add value and are hence required to be covered by your equity.


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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