Construction deposit account in numbers
This example helps determine your investment if you renovate your new home:
Say your new home has a market value of € 400,000, and you plan to make renovations for € 30,000. The appraisal states the estimated market value after renovation (and therefore the amount of your maximum mortgage) is € 420,000. Thus, at the time of the property transfer, the lender will transfer € 390,000 to the notary, and € 30,000 will remain in a construction deposit account.
You need € 430,000 to cover both the purchase and renovation. The mortgage is € 420,000 (maximum). This means you need to invest € 10,000 out of pocket. Note: you must deposit this amount at the notary before the transfer (in addition to the other compulsory buyer costs).