Renovate, refurbish, modernize – how does the financing differ?

Repainting the façade, repairing the leaky roof or insulating the exterior walls – for most homeowners, work on their own home will sooner or later come to their aid. In everyday life, the terms renovate, refurbish and modernize are often used interchangeably. But what exactly is the difference now? In order to finally find the right support for your project, you will learn in our blog post today how the three terms differ and what this means for your financing .

Renovate – beautify the home

Renovate - beautify the home

The living room can once again tolerate a new color and the painting of the window frames also needs a refresher. Optical beautification measures such as these fall under the term ” renovate “. Here, work is done that is not absolutely necessary, but primarily helps to make you feel better in your own four walls. Reason for this are usually wear and tear or the personal desire for change. Renovation works are also referred to as beauty repairs and can usually be done by any homeowner himself . These are simple works that do not require expert knowledge.

Typical renovations include:

  • Painting work, such as re-painting the facade or room walls
  • Replacement of the flooring
  • Wallpaper the walls

Refurbish – repair damages

Refurbish - repair damages

In contrast to the renovation, major damage to the house is eliminated during renovation. A repair repairs defects and restores the original condition of the building. Renovation is synonymous with the term ” repair “. For home improvements, inexperienced homeowners often need technical assistance , as the work is more complex and difficult than simple renovation. The elaborate work requires some of the intervention in the fabric of the house. Calling in experts is highly recommended here as they can help with their many years of experience and expertise, without causing any errors or further damage.

Typical refurbishment works are for example:

  • Elimination of mold
  • Replacement of defective water pipes
  • Repair of a leaky roof
  • Removal of pollutants like asbestos
  • Draining a cellar

Modernize – bring up to date

Modernize - bring up to date

Modernizing is about bringing your home up to date with a variety of measures. There must therefore be no serious damage for this. Modernization work should adapt the building again and again to the contemporary structural standards and also increase its utility value . So you can sell your modernized house more expensive than a house where only the bare necessities have been repaired for years. In addition, owners who regularly modernize their home can save costs, for example in the energy or water sector.

What includes a modernization is specified by law in §555b BGB. Accordingly, modernization measures are structural changes that must meet one of the following criteria:

  • Energy can be saved sustainably
  • Non-renewable primary energy (eg oil, coal, natural gas) can be saved or the climate sustainably protected
  • Water consumption is sustainably reduced
  • The general living conditions will be permanently improved
  • The utility value of the property is increased
  • The measures must be carried out on the basis of circumstances which the landlord is not responsible for and do not constitute conservation measures pursuant to 555a BGB
  • It will create new housing

Typical modernization works are for example:

  • Insert heat protection window
  • Replacement of a heating system – installation of a modern, more efficient heating
  • Modernization of the electrical system – installation of a smart home
  • Insulation of roofs or exterior walls

As a rule, modernizations are carried out on a voluntary basis. However, there are also modernization measures that are required by law . These include, for example, certain fire safety regulations that must be complied with.

Renovation, renovation, modernization – promotion and financing

Renovation, renovation, modernization - promotion and financing

To finance the renovation, refurbishment or modernization of your home, you can, for example, receive renovation or reorganization loans from some banks, as well as traditional real estate loans. These are regular installment loans, but these are earmarked. This means that the borrower can not freely decide what the loan will be used for. The bank has previously agreed to a loan agreement with a specified purpose. In return, the loan is cheaper than a normal installment loan.

Funding by Bank

The development Bank also supports refurbishment and modernization with various subsidy programs. It offers funding for energy renovation and age-appropriate conversion measures.

Bank promotional products:

  • Energy Efficient Refurbishment – Credit: Credit for an energetic partial or complete renovation of living space or the purchase of refurbished living space.
  • Energy Efficient Refurbishment – Investment Grant : The grant may be from private owners for an energetic renovation of living space or when buying refurbished living space.
  • Energy Efficient Refurbishment – Subsidy Construction Supervision: Grant for qualified construction supervision by an independent energy efficiency expert.
  • Energy efficient refurbishment – fuel cell subsidy: subsidy for the installation of stationary fuel cell systems in new or existing buildings.
  • Age-appropriate Rebuilding – Credit: Credit for renovations that promote living comfort or protect the house from burglaries.
  • Barrier Reduction – Investment Grant : The grant is intended to help private individuals to convert their home barrier-free and thus to increase living comfort.
  • Burglary protection – Investment subsidy: The subsidy promotes measures to protect a building against burglaries.

These products can also be used for modernization measures. Bank also supports the conversion of a home into a smart home with loans or grants. For this one can use either the financing offer “age-appropriate conversion” or “energy-efficient renovation”. With smart optimization , lighting and heating systems can be individually and energy-efficiently controlled.

Bank offers a number of loans and subsidies, especially in the area of ​​energy efficiency in refurbishments and new buildings. If you want to learn more about sustainable building , read our blog post on Green Buildings.


Find the right funding

In some cases it makes sense to combine the Bank promotional products. For example, if you want to refurbish both energy and barrier-free or you want to make your home burglar-proof, you can use the loans “energy-efficient renovation” and “age-appropriate conversion” together.

The funding measures in the field of ” Energy Efficient Refurbishment ” are:

  • Insulation of exterior walls and sunscreen
  • Renewal of the windows and sunscreen
  • Installation or renewal of a ventilation system
  • Insulation of the roof surfaces and the basement ceiling
  • Replacement of the heating
  • Installation of a photovoltaic system or a solar thermal system for the roof
  • Energetic specialist planning and construction supervision

The loan promotes the following measures in the areas of home comfort and burglary protection:

  • Wide paths and age-appropriate parking spaces
  • input ranges
  • Overcoming stairs and steps
  • Optimized room layout
  • Construction of a balcony, a loggia or a terrace
  • Remodeling of the bath
  • Intelligent assistance systems
  • Support from housing consultants, architects or craftsmen
  • Installation or retrofitting of doors
  • Securing windows and balcony and patio doors
  • Illumination of windows and doors
  • Installation of alarm systems
  • Installation of wide-angle spies, intercoms and video cameras

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