Financing a Renovation in the Netherlands: Every Option Explained

Option 1: Verbouwingshypotheek (renovation mortgage)

The standard way to finance a renovation when buying a home: include the renovation costs in your mortgage. Dutch lenders allow you to borrow up to 100% of the after-renovation value of the property (na-verbouwwaarde). If you buy a house for €350,000 and the appraiser confirms it will be worth €400,000 after renovation, you can borrow up to €400,000. That gives you €50,000 for renovations on top of the purchase price.

Key requirements:

• A verbouwingsspecificatie (renovation specification) that details what work will be done and the estimated costs. Your mortgage adviser or contractor can help prepare this.
• A taxatie na verbouwing — a valuation report that includes both the current value and the expected value after renovation. The appraiser needs your renovation plan to produce this. Cost: €800–€1,100.
• The renovation must generally be completed within 12 months (some lenders allow 24 months).

The renovation funds go into a bouwdepot (construction deposit account) at the lender. You cannot access the full amount at once. You submit invoices from contractors and the bank releases the corresponding amount. You pay mortgage interest on the total loan, but you earn deposit interest on the unused funds in the bouwdepot.

How the bouwdepot works in practice

The bouwdepot is a temporary account held by your mortgage lender. It works like this:

1. At closing (passeren), the renovation amount goes into the bouwdepot instead of to the seller.
2. When you receive an invoice from a contractor, you submit it to the lender (usually via an online portal).
3. The lender verifies the invoice and transfers the amount to the contractor (or to you if you paid upfront).
4. Any unused funds at the end of the bouwdepot period are used to repay your mortgage, reducing your principal.

The deposit interest rate on the bouwdepot is equal to or slightly below your mortgage rate. Since 2024, most major lenders (ABN AMRO, ING, Rabobank) pay bouwdepot interest at the same rate as the mortgage, which means you pay no net interest on the undrawn renovation funds. Check with your lender. This varies.

Option 2: Verhogen hypotheek (increasing your existing mortgage)

If you already own a home and want to renovate, you can increase your existing mortgage. This is sometimes called a tweede hypotheek (second mortgage) or a mortgage increase (hypotheekverhoging). The lender will assess:

• Your current income and affordability (same rules as a new mortgage application)
• The current value of your home and the expected value after renovation
• Your remaining mortgage balance — you can borrow up to 100% of the after-renovation value minus your current outstanding mortgage

Costs for a mortgage increase include a new valuation report (€800–€1,000), mortgage advice (€1,500–€2,500), and a new mortgage deed at the notary (€600–€1,000). There is no transfer tax since you are not buying a new property. The interest on the increased portion is also tax-deductible if the renovation is for your primary residence.

Option 3: Persoonlijke lening (personal loan)

For smaller renovations, a personal loan (persoonlijke lening) is the simpler option. You borrow a fixed amount at a fixed interest rate and repay in fixed monthly instalments over 1 to 10 years.

The drawback: the interest rate is roughly double a mortgage rate, and it is not tax-deductible. But there are no notary costs, no valuation required, and the application process is much faster (often within a few days). For renovations under €25,000, the speed and simplicity can outweigh the higher rate.

Be aware that a personal loan reduces your maximum mortgage capacity. BKR (Bureau Krediet Registratie) records the loan, and lenders must account for it when calculating your borrowing power. If you are planning to buy a home soon, take out the loan after your mortgage is finalised, not before.

Option 4: Energiebespaarlening (energy-saving loan)

If your renovation improves the energy efficiency of your home (insulation, double glazing, heat pump, solar panels), you can qualify for an Energiebespaarlening from the Nationaal Warmtefonds. These loans carry subsidised interest rates, well below market rates.

• Interest rate: as low as 0.0% for lower incomes, typically 2.5%–4.0% for most homeowners (2025 rates, income-dependent).
• Maximum amount: €65,000 (2025). Can be combined with other financing.
• Term: up to 20 years.
• Requirement: the renovation must result in at least two energy-saving measures from a qualifying list (e.g., floor insulation + heat pump, or wall insulation + HR++ glazing).

Combine the Energiebespaarlening with ISDE subsidies (Investeringssubsidie Duurzame Energie en Energiebesparing): a cash grant for heat pumps, solar boilers, and insulation. In 2025, ISDE grants range from €500 to €3,675 per measure, depending on type and scope. A subsidised loan plus a cash grant makes energy renovations much cheaper.

Option 5: NHG and renovation

If your total mortgage (purchase price + renovation) stays within the NHG limit of €450,000 (2025), you can include renovation costs under Nationale Hypotheek Garantie. There is even extra room for energy-saving measures: the NHG limit increases to €477,000 if the additional amount is spent on energy-efficiency improvements.

NHG-backed renovation mortgages come with lower interest rates (0.3%–0.6% lower) and the safety net of NHG if you can no longer pay your mortgage due to life events like divorce, disability, or involuntary unemployment. The one-time NHG premium is 0.4% of the total mortgage amount.

Option 6: SVn Stimuleringslening (municipal stimulation loan)

Many Dutch municipalities offer subsidised renovation loans through SVn (Stimuleringsfonds Volkshuisvesting Nederlandse gemeenten). These are low-interest revolving fund loans intended for specific purposes such as:

• Making a home more sustainable (verduurzaming)
• Removing asbestos
• Adapting a home for elderly or disabled residents (levensloopbestendig)

Conditions vary by municipality. Some offer 0% interest loans for sustainability improvements. Check your municipality's website or verbeterjehuis.nl to see what is available in your area.

Comparison table

Which option should you choose?

Buying a fixer-upper: Include the renovation in your mortgage (verbouwingshypotheek). You get the lowest rate, tax deductibility, and one loan structure. This is the cheapest option for renovations over €25,000.

Already own your home, major renovation: Increase your mortgage (hypotheekverhoging). Same benefits as above, though the application process takes 4–8 weeks and involves new advisory and notary costs.

Small or urgent renovation (under €25,000): A personal loan is faster and simpler. The higher rate is less painful on smaller amounts and shorter terms.

Energy-efficiency improvements: Check the Energiebespaarlening and ISDE subsidies first. A subsidised loan at 0–4% plus a cash grant of up to €3,675 per measure beats a mortgage.

Combining options is common. Finance a new kitchen via your mortgage increase and fund solar panels through the Energiebespaarlening with an ISDE subsidy. Your lender and mortgage adviser will check that total borrowing stays within responsible limits.