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Record Low Interest Rate for Renovation Loans

If you are considering a renovation, this is a good time to start. The annual interest rates are lower than ever before. Discover the best low-interest loans in this article and save money on your renovation loan.

Historically low interest rate on renovation loans

Historically low interest rate on renovation loans

The interest rates for borrowing money have fallen considerably. For example, in 2017 you can opt for a mortgage loan with a low interest rate of 1.82% on average, with a term of 20 years. If you want to carry out renovations, the annual interest rate is on average 2.9%. The interest rates on mortgage loans will always be cheaper than renovation loans, since the mortgage on your home gives the bank the assurance of getting its money back.

Classic renovation

Classic renovation

You have two options for financing a renovation. There are consumer loans and mortgage loans. The biggest difference between these loans is that the mortgage loan regards your house as collateral. In the event that you cannot pay off the loan on time, the bank has the option to seize your house. In addition, with a mortgage you must take into account registration and mortgage rights and notary fees, which is not the case with a consumer loan. Mortgage loans are primarily intended for larger amounts, while the consumer loan is better suited for small projects. It is always smart to calculate both options so that you know for sure what the most interesting option is.

Read our article: A renovation or housing loan for your next work?

With a renovation loan you can pay for almost all works. Think of a new kitchen, construction of a terrace or the addition of a second bathroom. However, you must show the invoices or quotations to your bank to account for the loan. For a renovation loan of € 10,000 with a duration of 2 years, the most interesting financial institutions are:

  SOP Savings Bank Huandi Madein Bank
Annual cost percentage (APR) 2.40% 2.55% 2.75%
Monthly payment € 427 € 428 € 429
Total repayment € 10,249 € 10,265 € 10,285

Green or ecological renovation

Green or ecological renovation

It is also important to know the difference between renovation loans and green loans. With green loans you can make adjustments to your house to reduce your fossil energy consumption. The type of renovation that is possible with this will differ per bank. With this loan you can usually insulate your roof, install photovoltaic solar panels and install a solar water heater or heat pump.

These loans are an initiative of the banks to achieve the nationally set climate targets for 2020. That is why there are very attractive interest rates. Discover the three most advantageous loans for a 2-year period below.

  SOP Savings Bank Huandi Madein Bank
Annual cost percentage (APR) 2.40% 2.55% 2.75%
Monthly payment € 427 € 428 € 429
Total repayment € 10,249 € 10,265 € 10,285

The three regions (Brussels, Wallonia and Flanders) both also offer energy loans. These green loans are very beneficial and are discussed in detail in this article .

Why renovate?

If the positive effect on the environment is not enough for you, there is also a financial argument for the renovations. You create a surplus value on your house, making it more valuable on the market if you ever start selling. Even if you are not going to sell, it is of course important to create the best possible home for your own comfort of life. With ecological renovations you can also lower your energy bill.