Buying a home that needs some work doesn’t mean paying for renovations entirely out of pocket. Dutch lenders can include a share of the cost in your mortgage, provided the numbers add up. Here’s how that actually works, including a worked example.
Short answer
Yes, you can include renovation costs in a Dutch mortgage, but how much depends on your loan-to-value (LTV) and loan-to-income (LTI) limits. As a rule of thumb, lenders often finance around 70% of the estimated renovation cost, based on your home’s value after the work, so you typically cover a meaningful share yourself, though the exact split depends on the type of renovation and your lender’s assessment. The appraiser values your home twice, before and after the planned renovations, to work out the exact amount.
What determines how much renovation budget you can include?
Two limits decide how much you can borrow for renovations: your loan-to-value (LTV) and your loan-to-income (LTI). Whichever of the two is lower always sets your ceiling, even if the other one has room to spare.
Including renovations mainly moves your LTV, because the work is expected to raise your home’s value. Your LTI, based on your income, stays the same regardless of your renovation plans.
What counts as a renovation for mortgage purposes?
For mortgage purposes, a renovation is anything that becomes a permanent part of the home: a new kitchen, a bathroom, or structural work, for example. Furniture and other items that aren’t attached to the property don’t count.
Before the appraiser visits, you submit a specification listing the planned renovations and your cost estimate for each one.
How much of the cost will the bank actually finance?
As a rule of thumb, lenders often finance around 70% of your estimated renovation cost, based on how much value it’s expected to add. That leaves roughly 30% for you to cover from your own savings, though the exact split isn’t fixed, a structural extension or energy upgrade is often counted more fully than purely cosmetic work, since it’s the resulting increase in value that determines how much the bank finances.
If your savings are limited, this typically limits not just your total renovation budget, but how ambitious your plans can be.
How does the renovation budget actually get paid out?
The renovation budget isn’t handed to you directly. It moves through a designated account and gets released against your actual invoices. In practice, that works in six steps:
- You submit a specification of the planned renovations and cost estimates to the appraiser.
- The appraiser visits the property and produces one valuation report with two values: before and after the renovations.
- Based on that report, the bank finances a share of the estimated cost, commonly around 70%, though this depends on the type of renovation and your lender and you contribute the rest from your own savings.
- Both amounts are placed together in a designated bank account tied to your mortgage.
- You submit receipts and invoices for the completed work as it happens.
- The bank pays out from the designated account against those receipts.
Worked example: how much renovation budget could you include?
A short example shows how these numbers typically play out in a competitive market, where buyers often bid above the asking price. It uses the commonly cited 70:30 split as an illustration. Your own lender may apply a different percentage depending on the renovations you’re planning.
| Step in the scenario | Amount |
| Asking price | €350,000 |
| Accepted bid | €375,000 |
| Maximum mortgage based on income (LTI) | €400,000 |
| Buffer left after one-off closing costs | €15,000 |
| Appraised value before renovations (cautious estimate) | €370,000 |
| Remaining buffer after that adjustment | €10,000 |
| Renovation budget the bank finances (~70%) | €20,000 |
| Total renovation budget included (your 30% + the bank’s 70%) | ~€30,000 |
| Appraised value after renovations | €390,000 |
| Final mortgage (lower of the €390,000 LTV-based value and €400,000 LTI limit) | €390,000 |
In this example, the buyer can include about €30,000 in renovations, and the final mortgage lands at €390,000, under the €400,000 income-based limit, so the value-based figure ends up deciding the outcome.
Why is it worth running the numbers before you place your bid?
Running the numbers before you bid means you know your realistic renovation budget in advance, instead of discovering the limit after your offer has already been accepted. Your buffer, your LTI limit, and the appraised value all interact, as the example above shows.
Working through this with a mortgage advisor early on means you’re not locked into a bid you can’t renovate the way you planned.
Key takeaways
- You can include renovation costs in a Dutch mortgage, but the amount is always capped by the lower of your loan-to-value (LTV) and loan-to-income (LTI) limit.
- As a rule of thumb, lenders often finance around 70% of the estimated renovation cost; the exact split depends on the type of renovation and your lender’s assessment, so treat this as an illustration rather than a fixed rule.
- The appraiser values the home twice, before and after the planned renovations, based on a specification you submit in advance.
- Renovation funds sit in a designated account and are paid out against receipts and invoices, not handed to you upfront.
- Running the numbers with a mortgage advisor before you bid helps you know your real renovation budget in advance.
How can we help you with a property which needs some work?
If you are interested to buy a property which needs some work, definitely reach out to us early in the process so that we can run the numbers with you and see what is possible. Or, read more about expat morgages or expat insurances here!
You don’t have to figure this out alone.
We’ll guide you step by step, all the way to your new home.
