Which loan should you choose for a renovation?

Are you planning to renovate your property and need to take out a loan to cover the cost of the work? We explain the advantages and disadvantages of each type of loan.

MORTGAGE LOAN

This is an option when borrowing large amounts.

Advantages:

• Currently low interest rates
• Long repayment term.
• In Flanders, it may still offer a tax advantage.

Disadvantages:

• There will be application fees, deed fees and notary fees (amounting to approximately 2–3% of the sum)
• In the Brussels-Capital Region, there is no longer a tax advantage for this type of loan.
• In the Walloon Region, the housing allowance is not granted for renovations (only for purchases).
• The capital amount depends solely on your repayment capacity.

RENOVATION LOAN

This is intended for small amounts

Advantages

• There are no deed fees (as no notary is required). The administrative process is therefore simpler.

Disadvantages

• There is no tax advantage
• The repayment term depends on the loan amount

GREEN LOAN

This is intended for work that will make your property more energy-efficient, as an energy-saving investment.

Advantages:

• Attractive interest rate

Disadvantages:

• Invoices and supporting documents must be provided throughout

PUBLIC-SECTOR LOANS

In all three Regions, it is possible to take out a highly advantageous loan subject to certain conditions.

You can check whether you meet these conditions on the following three websites:

• In Wallonia: https://www.swcs.be/
• In Brussels: https://homegrade.brussels/particuliers/primes/
• In Flanders: https://www.energiesparen.be/

Source: Indicator