Is the construction loan higher than the purchase costs due to possible repairs?

We just think that if we had to borrow money again in 1, 2 or 3 years, for the new small loan, we would get much worse conditions than if we simply increased the construction loan.

There are also several banks (ING for example) that offer loans specifically for homeowners, especially for modernization and renovation. The conditions are certainly not quite as favorable as for the construction financing itself, but still better than a regular installment loan for general use, which would then be taken out for this purpose. Advantages: You are flexible, can borrow money when you really need it, and with the manageable amount, the slightly higher interest rates hardly matter. That probably amounts to about €10 per month, so that really can't be the issue. Often, however, you have to have lived in the new house for a year – but that would suit you as well.

Advantages: You are flexible, can borrow money when you really need it, and with the manageable amount, the slightly higher interest rates hardly matter. That might make about €10 per month, which really can’t be the main issue.

I have to slow you down a bit. These construction loans/renovation loans have drawbacks.
1. A multiple of the normal construction financing interest rate (ING, for example, €5-10k at 3.59%)
2. Very short term, ING, for example, 24-96 months
==> So if the OP wants to borrow €30k, they have to spend at least €400 per month. That’s quite a figure.

Conclusion: If renovations are already being planned, then please include them from the start. That saves a lot of interest and significantly preserves liquidity. Such a construction loan should only be a last resort.

You are absolutely right on both points, of course. Indeed, the short term drives the rate up: for 30k€ currently 356.54€. Only apparently he doesn’t even know yet whether or not... that’s why I wanted to mention this flexible alternative.

Conclusion: If renovations are already being considered, then please plan for them from the start. That saves a lot of interest and significantly preserves liquidity. Such a construction loan should only be a last resort.

Absolutely true. I took out a similar amount additionally (also for things I initially thought I’d do later...)... integrated it into the main loan, today I would actually pay significantly less than half for it... but with this extra amount I am also done much faster.

Maybe also an option for the OP if he wants to stay flexible: a prefunded building savings contract. Interest rates there are significantly lower than the residential loan mentioned above. The catch here: you first save up and meanwhile pay interest on the whole loan amount.

Hi and thank you very much for your answers!

So I clearly understand: You can get more money from the bank than needed for the purchase, but only if you clearly know that you want to modernize and spend the money on that.

30k more as a "buffer" in case something comes up and invest the money yourself in the meantime but maybe never put it into the house (instead keep it in the savings account or buy a new caravan with it), the banks don’t agree to that. The money must be demonstrably used for the house (because the banks also want to sell their consumer loans).

Ok. Then that’s clear so far, thank you!

30k more as a "buffer" in case something comes up and invest the money yourself during that time but maybe never put it into the house (instead keep it in the savings account or buy the new caravan with it), the banks don’t go along with that.

Of course the banks go along with it. It's simply called "using less equity" and in return maybe accepting a worse condition that you carry with you for at least 10 years.