Buying to renovate: how much of your own money will the bank ask for?

The loan follows the value the bank gives the home after the works, not what they cost. Being able to afford the repayments is not enough: check the gap before you sign the preliminary sale agreement.

Example figures: replace them with yours.

The home will be

First home, to live inLoan up to 100% of the valueMain home, not my firstLoan up to 90% of the valueTo rent out, or a second homeLoan up to 80% of the value

Purchase price (€)

Cost of the works (€)

Including VAT, from your quotes. No quote yet? Estimate it

Share of the works the bank counts

Each bank sets its own share, between 0% and 80%. Ask yours: it is the figure that matters most here.

The bank has already valued the project

Value of the home as it is (€)

The bank uses the lower of the price and the valuation.

Works the bank accepts (€)

Banks may leave out finishes and personal fittings before applying their share.

Renovation grants you expect (€)Klimabonus deducted from the invoice by a registered company (possible from 1 January 2027 for some insulation works and heat pumps)

Own funds you need

€58,000

6% of the total cost of €908,000. The bank lends about €850,000.

For a home at €900,000 that needs no work, you would need about €24,000.

How the bank sees it

Home, as the bank values it: €650,000
Works counted (80% of €250,000): €200,000
Value for the loan: €850,000
Loan (100% of the value at most): €850,000

What you pay

Purchase price: €650,000
Registration and notary: €8,200
Works: €250,000
Total cost: €908,200

Not counted by the bank: €50,000 of the works. That gap comes out of your own funds.

Indicative only: each bank applies its own policy. Check the financing with your bank before you sign the preliminary sale agreement.

How we work it out

The home counts at the lower of its price and an independent valuation. The works count at the share your bank chooses: at most 80% of their cost (CSSF Circular 18/703, as amended in 2026). Banks decide how much of each kind of work they recognise.
The loan is capped at a share of that value (CSSF Regulation 20-08): 100% for a first-time buyer of their main home, 90% for other main homes, 80% for everything else, including buy-to-let. Being able to afford the repayments does not lift these limits.
Buying costs: registration duties of 7% less the Bëllegen Akt tax credit for a home you live in, notary fees of about 1.2% and a €400 administration fee. Works carry VAT, not registration.
Grants: the Housing Ministry’s improvement grants are calculated after the invoices, so they cannot go into the financing plan. From 1 January 2027 Klimabonus can be deducted from the invoice for some insulation works and heat pumps. Until 31 March 2027, under conditions, the State guarantee can count as own funds for the loan limit: ask your bank.
The comparison is a home that needs no work at the price plus the works: there the bank counts the whole price, so less of your own money is usually needed.

Sources: CSSF; Ministry of Housing and Spatial Planning; Ministry of the Environment, Climate and Biodiversity; Paperjam, 23 October 2026.

What can I afford? What does an energy renovation add to your home’s value?