Buying a home that needs work?

Or already own one but want to upgrade it?

Many homeowners wonder: can you get a bigger mortgage for renovations?

The answer is yes — in many cases, it’s possible to borrow more specifically for improvement costs.

It depends on the loan type, your eligibility, and local lending rules.

Let’s break down how renovation mortgages work, the types available, and how to make the most of them in Hungary or across Europe.

What is a renovation mortgage?

A renovation mortgage is a home loan that includes additional funds for improving, updating, or remodeling a property.

It allows buyers or homeowners to finance both the purchase and renovation costs through a single loan product.

This type of mortgage is particularly useful if you’re buying a fixer-upper or planning significant upgrades that would increase the property’s value.

Types of mortgages that can fund renovations

Home improvement loans

  • Typically unsecured personal loans or smaller credit lines.
  • Used for minor renovations like kitchen upgrades, new flooring, or repainting.
  • Fast to access but often come with higher interest rates than mortgages.

Housing loans with renovation options

  • Available through banks and financial institutions in Hungary.
  • Often tied to energy efficiency goals or structural upgrades.
  • Funds are released in stages based on renovation progress.

Bank-specific renovation mortgage products

  • Some lenders offer bundled home purchase + renovation loans.
  • Loan amounts depend on the estimated after-renovation value (ARV).
  • Ideal for buyers who want to finance everything in one go.

Tip: Always ask your bank if they support renovation-inclusive loans or home value reassessments post-renovation.

How to qualify for a renovation mortgage

Eligibility depends on your financial profile, project scope, and property valuation. Here’s what most lenders look for:

  • Stable income and low debt-to-income ratio.
  • Good credit score and repayment history.
  • Clear renovation plan including cost estimates, contractor quotes, and timelines.
  • Property appraisal showing increased value after renovation.

Benefits of getting a bigger mortgage for renovations

  • One loan, one payment – Simpler than applying for separate financing later.
  • Lower interest rates compared to personal loans or credit cards.
  • Boost property value – Renovations can increase equity and resale price.
  • Improve comfort and energy efficiency for better long-term living conditions.

Bonus: Some renovation-related costs may qualify for tax benefits or government incentives in Hungary.

Potential challenges in the Hungarian mortgage market

  • Strict loan-to-value (LTV) ratios – Banks may limit how much you can borrow based on current value.
  • Slow disbursement – Funds may be released in phases, requiring project coordination.
  • Limited renovation products – Not all Hungarian banks offer renovation-inclusive mortgages.
  • Paperwork and inspections – More requirements compared to standard housing loans.

How to use your renovation funds effectively

Once approved, it’s important to prioritize upgrades that maximize your return:

  • Focus on kitchen remodels and bathroom remodels, which offer the highest resale value.
  • Consider energy-efficient improvements like insulation or new windows.
  • Avoid over-improving—keep your upgrades aligned with neighborhood standards.
Need help managing your renovation budget? Reenova can assist with planning and executing your project from start to finish.

Alternatives to renovation mortgages

  • Home equity loan or HELOC – Suitable if you already own and have equity.
  • Government grants or subsidies – In Hungary, energy-saving upgrades may qualify.
  • Personal loans – Faster access, though typically at higher interest rates.
  • Cash savings – Best if the renovation budget is modest and you want to avoid debt.

Final thoughts: can you get a bigger mortgage for renovations?

Yes — with the right planning, documentation, and lender, you can secure additional financing to renovate your home or investment property.

Whether you’re buying a fixer-upper or upgrading your current space, a renovation mortgage can simplify your financing and maximize your property’s potential.

Is a renovation mortgage right for you?

If you’re planning to buy a property that needs work — or want to upgrade your current home — a renovation mortgage can be a smart financial tool.

It allows you to combine purchase and renovation costs into one loan, giving you flexibility and faster access to funds. But it’s not for everyone.

  • You want to increase your property’s value through improvements.
  • You have a clear renovation plan with realistic cost estimates.
  • You qualify financially based on income, credit score, and debt ratio.
  • You want to avoid juggling multiple loans for purchase and upgrades.

If this sounds like you, a renovation mortgage could help you unlock the full potential of your home — or investment property — without the financial stress of separate financing.

Need help figuring out the best renovation financing strategy? Talk to our team