New in Flanders: interest-free loans for renovations
1. What is an interest-free renovation loan?
Anyone buying a house or apartment in the Flemish Region in 2021 can obtain an interest-free loan for renovation work. The main purpose of the borrowed money must be to make your home more energy-efficient. You will not qualify for this loan if you are simply doing electricity work or replacing an old kitchen.
You need to commit to improving your home's energy rating in order to obtain the loan. Your home's energy rating can be found on the energy performance certificate. The energy efficiency rating goes from A, which is very energy-efficient, to G, which is very energy-inefficient.
- A house with an E or F energy rating must be converted to achieve an A, B or C rating within 5 years.
- An apartment with a D, E or F energy rating must be converted to achieve an A or B rating within 5 years.
You can take out a renovation loan together with a mortgage loan. Conduct a simulation here now.
2. Is the loan really interest-free?
If you take out an interest-free renovation loan, you have to make monthly repayments (capital and interest). You will then receive the interest you paid to the bank back from the government. This reimbursement is not made each month. It is paid annually in May.
3. Can anyone apply for a Flemish renovation loan?
The loan is only intended for natural persons. This means companies buying a property would not be eligible, for example. You also need to have a mortgage loan for the property in question. You have to submit the application based on a declaration of intent.
You can also apply for a renovation loan if you are not using the property in question as your primary place of residence, but as a property to rent or as a second home. This is subject to the condition that the home is primarily intended for private use.
If the home includes a granny flat, you cannot apply for two renovation loans. A granny flat is a private living space within the home and is not considered an independent property. In that case, only one renovation loan is possible for the entire property.
If you are buying a shop or office to convert it into a home, you are not eligible for a Flemish renovation loan.
If you inherit or receive a home that is not energy-efficient in 2021, this means you do not have a mortgage loan for that property. In that case, you can apply for an interest-free "energy loan+" from your Energy House.
4. How much can I borrow?
If you can achieve an A rating for a house within 5 years, you can borrow up to 60,000 euros interest-free. For a B rating you can receive up to 45,000 euros and for a C rating up to 30,000 euros.
If you can achieve an A rating for an apartment within 5 years, you can borrow up to 45,000 euros interest-free. For a B rating you can receive up to 30,000 euros.
|House with label E or F||Apartment with label D, E or F|
|to label A||60 000 euros||45 000 euros|
|to label B||45 000 euros||30 000 euros|
|to label C||30 000 euros||not applicable|
The average apartment in Flanders currently has a C rating, while the average house tends to have an E rating. By 2050, all homes in Flanders must have an A rating.
5. What is the term of the renovation loan?
The maximum term is 20 years. This term must not exceed the term of the mortgage loan.
6. What if I fail to achieve the target energy rating (on time)?
In that case, you will have to return the interest rate subsidies you received, and you will be charged a penalty. This will also be the case if you took out a renovation loan with the aim of achieving an A rating but only managed a B rating.
7. How can I prove that I have achieved the target rating?
You will have to present a valid energy performance certificate for 2019 or later to prove the house had an E or F energy rating or the apartment had a D, E or F energy rating. Certificates created before 2019 are therefore not eligible. You will have to present an updated certificate after the works or at the end of the 5-year inspection period at the very latest.
8. Can I apply for a free renovation loan at Keytrade Bank?
Yes, you can. You can take out the renovation loan together with your mortgage loan at Keytrade Bank.
This article does not contain any investment advice or recommendation, nor a financial analysis. Nothing in this article may be construed as information with a contractual value of any sort whatsoever. This article is intended for information only and does not constitute in any way a commercialization of financial products. Keytrade Bank cannot be held liable for any decision made based on the information contained in this article, nor for its use by third parties. Every investment entails risks such as a possible loss of capital. Before investing in financial instruments, please inform yourself properly and read carefully the document "Overview of the principal characteristics and risks of financial instruments" that you can find in the Document centre.