I'm going to renovate

Mortgage for renovations

Renovations can drastically increase your property value. Is the kitchen in need of an extension or are you dreaming of a dormer window? These are prime examples of value multipliers for real estate. Increasing the value of your dream home isn’t only good news for you, it’s good for the potential to finance your renovations together with your mortgage.

To determine the exact amount you can finance, the lender will use the value of your home after the renovations as compared to the value before the renovations.

Please note: renovation usually does not mean a one-on-one increase in value. For example, there may be a difference between the market value before and after renovations when compared to the renovation costs. Insofar as the renovation costs do not lead to a value increase, you must be able to prove that you are able to finance this difference with your own money.

How does to financing of renovation activities work?

Construction specification

Create an overview of your plans and costs using a construction specification. The specification should be a realistic estimate but does not have to be 100% accurate.


Give the construction specification to the appraiser (please note: the costs of a renovation must be determined on time and must be as complete as possible).

Market value after renovations

On the basis of the specification, the appraiser will include the value of the property post renovations in the appraisal report. This value may be used in determining the maximum lending capacity on the basis of the property (in 2022: 100% of the property’s market value).

Finalize the financing scheme

Once the costs and the post-renovation market value become clear, the financing scheme can be finalized and financing may be requested.

Construction deposit

The complete costs of renovation in accordance with the construction specification will be stored in a construction deposit. This amount will only be made available once the actual work activities will be carried out. This requires several declarations. Any remainder is generally used to pay off the loan.

What is a construction deposit account?

A construction deposit account is a special, blocked account within which you reserve an amount for scheduled renovation work or new-build property. The construction deposit account is part of your mortgage. From the construction deposit account, you pay the invoices for renovation work and materials.

How does a construction deposit account work?

Are you buying a fixer-upper or a new-build home? If so, then in most instances, a construction deposit account is set up with your mortgage. The amount you withdraw from that construction deposit account is determined by two factors:

  • The work you are looking to have carried out
  • The value of your home (before and after renovation work)

    Once your mortgage term commences, the lender will deposit the amount into a blocked account. During the construction or renovation of your home, you declare the invoices for these works to the lender.

    The construction deposit account ends when your construction or renovation is finished or after a certain period. Often at that time, the entire amount from the construction deposit account will have already been used, but there can be instances when there is an amount left over. That remaining amount will then used towards repayment on your mortgage.

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