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Renovation credit: why should Swiss homeowners choose this type of loan?

Blog | Credit | Real estate loan

In Switzerland, according to the Federal Office for Statistics, more than one out of three people is a houseowner, and this number is constantly increasing.

More and more houseowners

Owning a house has many advantages, but it also comes with important costs: repair, transformation, renovation…The maintenance costs are estimated at around 1% of the house’s value, and this is per year. Is renovation credit a good solution to cover these costs? We drew a list of 5 advantages that come with a renovation credit.

How does a renovation credit work?

A renovation credit works exactly like a usual consumer credit. The houseowner will request a loan from 3’000 Chf to 150’000 Chf (sometimes more) to a bank, a credit agency or an independent broker. The monthy cost will then depend on:

  • The reimbursement duration: from 12 to 72 months (sometimes more).
  • The interest rate: from 6.9% to 14.5%.

Please beware that the total interest will mostly depend on the reimbursement duration and not on the interest rate.

Why choosing this type of loan?

The estimated 1% of the house’s value is only an average. A homeowner can also live in his house for more than 10 years without having to repair anything and then have to face important maintenance fees that exceed his budget. In such a case, a renovation credit has many advantages!

    • Simple and fast procedures: once you make the request and send all the forms, you will get a quick answer and the money will be sent only 7 days after the contract is signed.
    • An advantageous cost on a short-term duration: a credit that is quickly reimbursed will always be advantageous. For instance, 40’000 Chf reimbursed on 12 months will only cost 2’000 Chf (with a interest of 9.95%). On a long-term duration, the costs slightly increase.
    • Fiscally interesting: homeowners can deduce the renovation credit interests out of their wage for the tax return.
    • A total freedom: the credited amount can be used without justification. It is then possible to use 50’000 Chf on a roof repair, room renovation, new equipments and why not a trip to relax after the work!

Where to request your credit

There are many credit agencies and banks in Switzerland! Where should you then go for an advantageous renovation loan? It it always better to find a financing partner that is close to you an experienced (see for example Multicredit, that has brokers that can meet you in the whole of Switzerland)! Verfify that your contact has a website and appears in a directory for it will show you how serious their offers are!