Whether you have just bought a house or have been living in your house for years, there may come a time when you want to renovate. A new dormer window, kitchen or garden? All renovations for which you might not have enough money. You can then choose to increase your mortgage or take out a second mortgage.
Savings vs. mortgage
For small renovations, we recommend that you use your own savings. For example, if you’ve saved more than € 30,000 (or more than € 60,000 for partners), you pay capital gains tax. It may then be cheaper to (partially) use your savings for the renovation.
A second mortgage for your renovation
It is possible to take out a second mortgage with the bank where your first mortgage is running. It’s important to monitor the relationship between the amount of your mortgage and the value of your home. The bank runs a higher risk with a second mortgage. For that reason you may therefore have to pay more interest on the second mortgage.
Increasing your mortgage for the renovation
You can also choose to co-finance your renovation with your current mortgage. You then increase your current mortgage, often without having to pay notary fees. The bank still looks into whether you can pay the additional charges and can meet the minimum requirements.