Take out a loan next to a mortgage
You can still finance a renovation for your home with your mortgage this year; from 2018 this is no longer possible. If you then want to realize a renovation, you are dependent on equity or you finance the renovation with a loan. The rules regarding mortgage lending are becoming stricter. Next year you can only finance the purchase amount of the property with a mortgage. Extra money with your mortgage to be able to pay for a renovation to an extension, kitchen or dormer window is no longer possible.
Can I take out a loan in addition to my mortgage?
You have a mortgage and you want to take out a loan. Is that possible? The answer to this question is yes, but there are a number of preconditions that you must meet in order to actually take out the loan. The lender will determine which loan amount is possible in your situation. Not only the amount of your mortgage and the associated monthly payments play a role in the granting of the loan, but also the family composition, your age, your income and the presence of any other loans or purchases that you have made on installment.
A loan, in the form of a personal loan, revolving credit or combination credit, entails monthly costs. These interest and repayment costs are in addition to the current fixed monthly charges that you already have. The loan must be a responsible loan so that you do not get into financial difficulties and can no longer meet your payment obligations. Because taking out a loan is a good option when renovating your house, but borrowing money costs money; you do not borrow for free.
How does it work?
You can request a loan from your own bank, but you will not receive a competitive proposal with regard to interest. The bank will make a proposal for a personal loan and a revolving credit with the associated interest and conditions. You can make a choice here.
If you go to an independent lender you will receive a proposal from several banks . The loan forms, the various interest rates and conditions are clearly arranged so that you can easily choose which proposal suits you best.
How do you apply for a loan online?
If you have sufficient financial knowledge, you can apply for the personal loan, revolving credit or combination credit yourself. You don’t have to come to an office for advice, so that saves time. You do not pay any consultancy and closing costs for taking out a loan online. And in case of doubt there is always a tool that can help you further. With us this is the loan guide.
If you choose to arrange a loan online, the interest rates are low. An online credit broker or provider has fewer high costs for office buildings and staff.
Three loan forms
You can choose from three loan forms: the personal loan, the revolving credit and our combination credit.
A personal loan has a fixed interest rate and duration. The interest rate is very low at the moment, so if you choose this type of loan, you will benefit from this low interest rate for the entire duration of the loan. The loan has been fully repaid on the loan end date. A personal loan provides security. You know where you stand; you pay the same fixed amount in interest and repayment every month.
If you want extra money in addition to the renovation of your home, then a revolving credit is a suitable form of loan. The interest and duration are variable; the monthly charges can therefore also vary. You only pay interest on the part of the loan taken out. Have you repaid an amount but do you need it again? You can record it again. This flexibility does not have a personal loan.
Do you need a high amount for the renovation? The combination loan has been specially developed for this. We then place two personal loans in spread with our partner banks. Thanks to this risk spread for the bank, they offer low interest rates and favorable conditions. A combination of part revolving credit and part personal loan is also a possibility.
Do you have extra money in the meantime? You can redeem this free of charge with all loan forms so that the debt is reduced.
Advantages loan compared to mortgage
The rules for mortgage lending will be tightened further next year, but that is not necessarily a disadvantage. Financing a renovation with a loan instead of through the mortgage, which has a term of 30 years, means a shorter term; the loan is therefore repaid faster. If you take out a personal loan to improve your home, the interest costs are tax deductible.
How much can you borrow?
Do you have a mortgage and are you curious about how much you can borrow for your new kitchen or bathroom? Calculate it yourself online and see what your options are.