Financing Home Renovations with a Mortgage

Planning to renovate your home? A mortgage can be a smart way to finance your renovations, whether you're making small improvements or undertaking a major overhaul. Here's how you can include renovation costs in your mortgage and the options available if you already have an existing loan.

Including Renovations in Your Mortgage

If you're buying an older home and want to renovate it immediately, you can include the renovation costs in the same mortgage you use to purchase the property. This means that the renovation expenses are fully covered by your mortgage, so you don't need to take out a separate loan for the works.

The process is simple: get a quote from the contractor who will carry out the work and submit it to your lender before signing the mortgage agreement. This way, the total amount—including renovation costs—will be included in your mortgage.

A Mortgage for Renovation Work

It’s also possible to take out a mortgage specifically for renovation work. This is a great option if you want to make your home:

• Healthier, for example, by addressing moisture issues or improving ventilation.
• More stable, such as repairing structural damage.
• More comfortable, for instance, by adding living space or making energy-efficient upgrades.

The loan amount for the necessary work will be covered by the mortgage. Keep in mind that this option is only available if you don’t already have an existing mortgage on the property.

Extending Your Existing Mortgage for Renovations

If you already have a mortgage, there are still ways to finance renovations without applying for a completely new loan. This can be done in two ways:

1. Reinstating Your Existing Mortgage
   If your mortgage hasn’t been fully paid off, you can request to reinstate it. This means you can borrow back part or all of the capital you’ve already repaid. The advantage of this approach is that you can use your existing mortgage, so you don’t have to go through additional paperwork or incur extra notary fees.
   
   
2. Reinstating After Full Repayment
   If your mortgage is fully paid off but the mortgage registration is still valid, you can also reinstate it. This allows you to borrow the necessary amount within the limits of the capital already repaid. However, the term of your new loan will be limited by the remaining term of the original mortgage. There are also administrative fees for reinstating the loan, typically ranging from €400 to €500.
   
   

Conclusion

A mortgage offers multiple options for financing renovations, whether you're purchasing a new home or upgrading your existing one. By including the cost of renovations in your mortgage, you can simplify the process and benefit from lower interest rates. If you already have a mortgage, reinstating it can be a practical way to fund your renovation without additional hassle. Make sure to submit a clear quote to your lender and discuss your best options for your specific situation.