Renovation Loan: Your Remodel at Affordable Terms

Through privatkredit.ch we take over the search for you: we know the banks and know which institution prefers which profile, and prepare your request accordingly. You submit a request, we bring it to the matching providers, instead of you struggling through bank after bank on your own. Every single inquiry at a bank leaves a record and can burden your own creditworthiness, often without you ever learning what it would have failed on.

A renovation loan through privatkredit.ch is a cash loan with no restricted purpose: the money flows into your account, and you decide yourself when and how you renovate. Still, it's worth looking at what typical renovation projects cost and what you can achieve with them. Replacing an eighties kitchen with a modern, equivalent kitchen? Tax-deductible. Upgrading a standard kitchen to a luxury version with a marble countertop? Not deductible. The line between value-preserving and value-adding is decisive and varies by canton. When in doubt, it's worth asking the tax office.

Anyone who owns a home basically has two ways to finance a renovation: the renovation loan or increasing the mortgage. The mortgage increase does have the lower interest rate, that's true. But you need a property valuation, a land registry entry, and the process takes weeks. For a kitchen renovation over CHF 20'000, that's often overkill. The renovation loan is less complicated, faster and offers plannable installments. Rule of thumb: up to around CHF 50'000, it's usually the more pragmatic route, from CHF 80'000 it's worth looking at the mortgage, in between it depends on your situation.

What influences your personal interest rate: a regular, verifiable income speaks for better terms, as does a clean ZEK entry without open debt collection proceedings. The term also plays a role: shorter terms usually bring better interest rates. On CHF 25'000 over 36 instead of 60 months, you quickly save several hundred francs in total costs.

Good to know: if your renovation is value-preserving, you can deduct the costs in your tax return. Value-preserving means you replace something existing with an equivalent: old kitchen out, new kitchen in, renovating a bathroom from the sixties, repairing a roof. Energy measures such as a new heating system, better windows or facade insulation reduce energy consumption and are also deductible, in many cantons additionally supported by the building program or cantonal subsidies. Value-adding investments such as a pool, a conservatory or a luxury kitchen that goes beyond the previous standard are not deductible. Value-preserving tax deductions for properties are expected to apply in Switzerland until 2028, after that this deduction will lapse with the planned abolition of imputed rental value. Anyone wanting to renovate therefore has good reasons not to wait too long.