As a homeowner, you know that jobs big and small will always be part of the package. Admittedly, this represents a cost which turns out to be considerable all the same. The best solution ? Take out a renovation loan. It's simple, attractive and efficient.
Swiss buildings have major energy renovation needs
For the renovation of owned accommodation, many homeowners have chosen the renovation loan. This method of financing simplifies the realization of small and large works while prioritizing priorities. You will no longer have to "tighten the belt" to renovate and modernize the bathroom or wait until next year to bring your heating and insulation system up to standard. So restore your home more easily with work. You are thus rectifying the situation in terms of imperfections or deficiencies in the energy efficiency of your home.
A study conducted by the Swiss Society of Entrepreneurs gave the following estimate of buildings in need of repair: There are no less than 1.5 million, which have deficiencies in terms of energy, insulation and comfort. To renovate your home, consider taking out a renovation loan. Calculate the costs generated by your loan and quickly obtain the funds that will allow you to carry out your work.
Obtain a private loan for its renovation in favor of a mortgage loan
Why do you need a renovation loan? Do you have a roof to replace, facades to refresh, wallpaper to install, sanitary facilities to modernize or even walls to insulate? A renovation loan will allow you to comfortably carry out your projects. This is thanks to cost control given that you will have the choice and the possibility to better select your provider.
Private credit represents a much faster and more advantageous solution than a mortgage solution. Of course, the mortgage loan can be used to finance the purchase of real estate as well as to cover important works. However, consumer credit remains more useful for small amounts of work.
To undertake the necessary renovations to your home, obtain a private loan using our calculator and simulate your refund online for free. You will be able to determine from the start which monthly payments are in line with your financial situation. Do not hesitate to ask us to ask us for a comparison and obtain all the important information before you embark on your renovation loan project.
The conditions for obtaining a renovation loan
The conditions for granting a renovation loan are much less restrictive than if it were a mortgage loan. However, you will always have to justify a small file to benefit from your financing. The conditions remain the same, whether it is a primary, secondary or rental property. Here is the list of the first documents to collect:
- A copy of your ID
- Your last three salary statements
- A copy of your mortgage contract
Even before collecting your documents, you can already make a non-binding request using the following button:
When should you choose a mortgage loan rather than a private renovation loan?
When buying property in Switzerland, taking advantage of a mortgage loan seems more appropriate. For real estate that would be located abroad and that would cost less than 250,000.-, personal credit will however remain an excellent solution. You should rather orient yourself on a mortgage loan if your work is important. This, in the event that the sum is greater than 250,000.-.
However, when applying for a renovation loan, you will have to present the quotes for the work to be carried out to your bank in order to obtain validation. Then, you will present your invoices to this same establishment for payment. In general, the bank that will accept your mortgage financing will ask you for a contribution of 20 % of the amount of the work.
What if the work to be done occurs after the purchase of the property?
In this case, the procedure will be a little more complex, since you will have to take certain steps. You will first have to demonstrate to your bank how carrying out this work will add value to your property. Then, you may need to go back to a notary to create or increase the mortgage certificate.
Note that this will incur more or less substantial costs. Be careful, your file will be refused if your mortgage loan has already reached its ceiling. So think more of a renovation loan or a consumer loan if the request for work is not part of the purchase of real estate. This method of financing is more flexible, simpler, less expensive and requires almost no proof.
The rates applied and the repayment period of the renovation loan
Depending on the bank, the rates for private loan renovation loans vary between 3.9% to 9%. It is certain that in comparison, mortgage rates vary between 1% and 2% depending on the bank and the duration of the loan. They are therefore lower than those of private credit. To consider whether it's really interesting or not, you will have to look at the duration and your budget. Indeed, the repayment of a mortgage loan can be spread over many – even decades – of years. Some borrowers even have it for a lifetime.
The private renovation loan generally caps the duration of the loan at a maximum of 84 months. However, this depends on the selected financial institution. Some will be able to make a few exceptions, others will be inflexible. You also have the possibility of renegotiating the rate during a private loan. This, depending on your projects and the duration of the loan. When you therefore calculate over the long term, private credit will have cost you less with interest. This due to a shorter repayment term.
Bet on a renovation loan to finance small works
You will therefore have understood: there are many advantages to opting for a renovation loan rather than increasing your mortgage. Indeed, in this second case, the obstacles can very quickly discourage the owner. Especially when the latter asks for a small amount. For a renovation involving an amount of CHF 20,000.- for example, it is rare for a mortgage increase to be granted. Banks are cooperative only when the amount requested reaches CHF 200,000.- or more.
In terms of renovation credit, the owners of their home generally enjoy special conditions to finance their more or less important work, especially if it is their main residence. In addition, interest rates can be negotiated and are generally at a reasonable level in relation to the borrower's needs and repayment capacity.
Insurance and guarantees that will protect your private credit
Opt for a banking institution that is able to provide you with a complete security package, including a guarantee of monthly payments included in the event of death, unemployment or disability. For even more security, do not hesitate to take out monthly payment insurance. This type of insurance aims to guarantee the reimbursement of interest and monthly payments if a case of involuntary unemployment were to occur, or if you were to find yourself incapacitated for work. If a possible disaster were to occur, the renovation loan taker could take a break between the payments of his monthly payments, always under conditions of course.
In conclusion, mortgage or private renovation loan?
Let's say that the 2 are equal and that it is really a question of studying well what suits you best. Note, however, that it is preferable to switch to a mortgage loan when it comes to financing the work as part of a real estate purchase. But that becomes much less interesting when the property in question is already your property. Whichever you choose, take the time to calculate the interest over the repayment term and compare the results, as this could tip the scales. You will eventually realize that the cheapest and easiest solution is the renovation loan.
Now that you know the benefits of renovation credit, all you have to do is apply. With Lica It's simple, fast and effective ! And yes, you make your request online in less than 2 minutes and then our specialized teams do the work for you. This saves you time and money! To apply for credit without commitment, simply click on the following button:
Do you have questions before making your request? Our advisers are there to answer your questions 7 days a week. Ask us for more information and we will be happy to answer you.