Taking out a loan for energy-saving renovations: what are your options?

Belgium is one big construction site and this will not change any time soon. While high energy bills are the driving force behind this, the energy standards for buildings are becoming more stringent. Energy-efficient renovation is the key message of the day. Several options are available to you regarding how to finance your project. This article takes a look at each one.

1. Interest subsidy for the purchase of a home to be renovated (Flanders)

Are you buying a house or apartment with an EPC rating of E or F in the Flemish Region? If so, you can take out a (low-interest) renovation loan on top of your traditional mortgage loan with the same bank at a fixed interest rate. If you take out a renovation loan of this kind, you undertake to renovate the purchased property in an energy-efficient way within five years. Specifically, this means you then need to upgrade the property to a D rating at the minimum. The lower the energy rating you are aiming for, the higher the interest rate subsidy. For example, let's say the interest rate on your renovation loan at your bank is 4.5%. In that case, you will only pay 2.5% interest thanks to the interest rate subsidy if you choose to renovate to a D rating (you will receive a 2% interest rate subsidy). If you renovate to a C rating, you will receive a 2.5% interest rate subsidy. This becomes 3% for a B rating and 3.5% for an A rating.

You should be aware that the subsidy is not applied immediately. You pay the full interest amount to your bank first, and the Flemish Energy and Climate Agency then deposits the interest subsidy into your account once a year. Your bank may charge a handling fee. This renovation loan allows you to borrow up to EUR 60,000, with a maximum term of 20 years. The better the energy rating you are targeting, the more you can borrow. Please note that you can only take out this loan if you are buying a home. For those who already own a home, other solutions are available. Find out all the details and terms and conditions.

2. My Renovation Loan (Mijn VerbouwLening) for people who have owned a home for a while (Flanders)

Through to the end of 2026, you can apply for a "My Renovation Loan" via the Flemish government and Het Energiehuis for your municipality. You can borrow up to EUR 60,000 for renovation work, with a term of up to 25 years. This is a loan with a fixed interest rate. Here, too, you have to meet a few conditions in order to have access to a loan:

• Anyone already receiving an interest rate subsidy (see above) for buying a home to be renovated will not have access to this type of loan.
• The home must be at least 15 years old (solar water heaters, heat pumps and solar panels may still be eligible if the home is less than 15 years old).
• In addition to energy-saving measures, other kinds of work are eligible for the loan, such as sanitary, electrical and foundation work. Demolition and reconstruction are not covered.
• Income limits apply.

The loan remains interest-free for as long as the statutory interest rate remains below 3%. If the statutory interest rate rises above 3% annually, the interest rate for "My Renovation Loan" will also increase. This rate is adjusted once a year, usually in January, but it may also be later. In this case, the new interest rate only applies to new loan applications. If you have already taken out a loan, your interest rate will not change. When a new statutory interest rate is published in the Belgian Official Journal, the new interest rate (statutory interest rate minus 3%) will be applied to all applications for a My Renovation Loan from that publication date onwards.

Find out all the details and terms and conditions

3. Ecoreno loanfor anyone who is buying a home or already owns a home (Brussels)

Anyone wanting to roll up their sleeves in the Brussels-Capital Region can also benefit from a reduced-cost renovation loan with a fixed interest rate. An additional benefit is that it does not necessarily have to be for energy-saving measures. Work on a traditional renovation or changes to adapt your home for your old age are also eligible.

You can take out the loan either in the form of a mortgage loan or a consumer loan. In the first case, you will need to involve a notary (additional costs). The second case does not require this (no costs).

If you take out a mortgage loan, you can borrow up to 120% of the value of the property. The maximum term is 30 years. With a consumer credit facility, you can borrow up to EUR 25,000 with a term of up to 10 years. Depending on your income, you will currently pay between 3 and 4.5% interest on the mortgage loan and 0 to 1% interest on a consumer loan (current as of January 2023).

Find out all the details and terms and conditions.

4. Renopack for homeowners (Wallonia)

The Renopack is a loan with a fixed interest rate for owners who want to renovate their home in the Walloon Region. You can borrow up to EUR 60,000 with a maximum term of 30 years. The loan is currently completely interest-free (current as of January 2023).

A wide range of works are eligible for this loan. Energy-saving measures, of course, but also roofing, flooding measures and electrical works.

Anyone who wishes to take advantage of this credit facility has to take various conditions into account. For example, the home must be at least 15 years old, there are income limits and the work must be carried out by a contractor. Apply via the Société wallonne de Crédit social.

Find out all the details and terms and conditions.

5. Green loan or eco loan (Belgium)

What if you do not meet the conditions for an interest rate subsidy, the My Renovation Loan/Ecoreno credit/Renopack? You can still enquire at any bank about a green loan, also known as an energy loan or eco loan. These loans are granted only if a certain minimum percentage of the amount borrowed is used for energy investments, such as solar panels, insulation, high-efficiency glass and heat pumps.

For this type of loan you can usually get a slightly more favourable rate than for a standard renovation loan (see below), though it is still a good idea to compare the rates and conditions of the different loans ("green" and "not green"). You do not need to involve a notary to take out this loan.

6. Classic renovation loan (Belgium)

With a renovation loan, the investment does not necessarily have to be aimed at improving the energy rating of your home. You can use the money for all kinds of renovation and refurbishment work. As for an eco loan, you do not need to involve a notary.

7. Mortgage loan (Belgium)

The maximum term for an eco loan or renovation loan – depending on the bank – is generally relatively short (10 years). For longer terms, a mortgage loan may be appropriate. If you already have a mortgage loan, re-starting the existing loan may be a suitable solution, especially if you have already repaid a large part of your loan. You can then use your existing mortgage to guarantee a new home loan. This enables you to avoid new notary fees and mortgage costs. However, the interest rate on the amount you re-borrow will no longer be the same rate as your existing loan, but instead will be the current rate.

If you take out a completely new mortgage loan for your renovation project, this can end up being expensive. You will also have to go back to the notary.

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