Financing of Renovations

Financing renovations is crucial for property owners who wish to modernize or energetically renovate their homes. Renovation measures not only increase the property's value but also contribute to the long-term reduction of energy costs. Careful planning and the selection of appropriate financing options are of great importance in this context.

There are various options available for financing a renovation: classic installment loans, modernization loans, or the extension of an existing construction financing. The installment loan represents a flexible and prompt option to finance smaller renovation projects. It is repaid in fixed monthly installments over an agreed-upon term, without the need for collateral in the form of land charges.

A modernization loan is specifically aimed at renovation and refurbishment projects and often offers more favorable conditions than a classic installment loan. Typically, the loan amount is higher, and the terms are longer, resulting in lower monthly payments. Many banks also offer special programs that include particularly favorable interest rates for energetic renovations.

Extending an existing construction financing is an additional option. In this case, the existing mortgage is topped up by the required amount. This can be particularly advantageous if the original terms are favorable. However, a new appraisal of the property is necessary, and the bank will recheck the owner's creditworthiness.

Government funding programs play a significant role in the financing of renovation measures. The Kreditanstalt für Wiederaufbau (KfW) offers low-interest loans and grants for energetic renovations as well as age-appropriate modifications. It is advisable to check the various funding options and possibly incorporate them into the financing plan.

Careful planning of the renovation as well as precise cost calculations are essential. A detailed financing plan should take into account all incurred expenses, including material and labor costs as well as possible additional costs such as building permits or expert fees.