How to divide between debt and equity

Hello everyone,

we are planning to buy a house, which I have already reported about here:


Since there is no rush on any side and we will only get the keys in April 2024, everything is still open for now.

The question we now face is how to structure the €320,000 capital (partly private loan). Basically, we can pay the purchase price plus incidental costs without a financing bank. Then we would run the renovation as a loan from the bank.

The bank itself says it doesn’t make a difference and we should decide what to do ourselves.

The advantages are that we can first close the house price like this. The disadvantages we see are that with a renovation the costs are naturally less predictable. Since we want to do a lot ourselves, the whole thing will also take a long time, which negatively affects us regarding the money not yet drawn.

Since we could theoretically get renovation subsidies or a worst performance bonus, that would speak in favor of the loan for the renovation. However, a renovation to an energy-efficient house will be very expensive, and many people in our vicinity rather advise against it.

Therefore, the idea is rather to partially take out a loan for the house and realize the renovation without subsidies using equity.

What do you think?

It is definitely much easier to carry out the renovation with equity. You don’t have to make fund requests, you don’t have to collect invoices and submit them at the end for the final payment, etc. Especially towards the end, our bank has been and is really becoming difficult.

If the bank agrees, I would pay for the house with the loan and the renovation with equity. Or at least the majority with equity.

We are doing the same right now and can only recommend it for the reasons already mentioned.

Getting a funding-eligible efficiency house is really difficult, we are not doing that either. You can also get funding from [BEG EM] and through the tax return.

Explore how much credit is even possible. The bank probably won't provide the entire purchase price on credit due to a safety buffer. So, use equity to cover the remainder. knows both sides (renovator and banker) from personal experience and may be able to answer in more detail...