What are the financing options for renovating an owner-occupied home?
When can I apply for an increase in my mortgage, and when is a loan the better option?
Cheaper loans: Why you benefit twice over with BANK-now as a homeowner.
Homeowners know that renovation work, whether a minor fix or a major project, is needed at regular intervals. Faults need to be repaired or the kitchen, bathrooms and heating need to be updated. Due to poor energy efficiency alone, 1.5 million buildings in Switzerland are considered in need of renovation according to estimates by the Swiss Contractors' Association.
If you are looking for a solution for financing a construction project, there are essentially two options: increasing the mortgage or taking out a loan. The former is a good idea, but in reality it is not uncommon for borrowers to encounter obstacles. "In many cases, it is not possible to increase the mortgage," explains Paul Baumgartner, credit expert at BANK-now. Especially when relatively low amounts are involved, these requests can fall on deaf ears at many banks. Mortgage increases are not generally approved for value-maintaining measures such as the renovation of a kitchen in the region of CHF 20,000. "When it comes to amounts of CHF 100,000 and above, banks are certainly more open," says Baumgartner.
Special conditions for homeowners
With this in mind, a loan is a good solution for financing small renovation projects. With BANK-now, homeowners benefit from attractive special conditions. "Our interest rates are between 5.4 % and 6.9 %," says Baumgartner. By comparison, the interest rate for a personal loan in Switzerland is normally in a higher range, up to a maximum of 9.9 %. BANK-now offers an exclusive rate to anyone who has owned their own home in Switzerland for at least six months and can prove their ownership with an entry in the land register. These more favorable loan conditions are offered because the lender has a certain amount of security here: "Experience shows that anyone who owns a home lives in it for a certain amount of time," Baumgartner explains.
When taking out a loan with BANK-now, clients also benefit from a comprehensive security package. This includes, for example, free payment protection in the event of death. In addition, the interest and installment repayment can be optionally insured against involuntary unemployment and incapacity to work. If necessary, the borrower can also take a break from payments. If something unexpected comes up, for example the payment of a tax bill, the installment payment can be deferred free of charge. "We even offer this option to our clients twice," says Baumgartner. What's more, every client has the option to withdraw from the contract after ten days, without giving reasons and without a fee. "No other bank in Switzerland offers a security package like this."