Finance modernization: These 3 options are available!

Financing modernization

Modernization of one's own four walls is on the agenda for every property owner at some time or another. Whether the roof is getting on in years or the old heating system is in desperate need of replacement – there are many reasons for a need. In this guide, you'll learn about the different options for financing a modernization and what you should keep in mind.


1. Modernization loan or installment loan

2. Financing modernization with state subsidies

3. Modernizations are financially manageable

1. Modernization loan or installment loan

When deciding on suitable financing, there is a choice between various options today. In addition to a conventional installment loan without a fixed purpose, many banks today also offer special modernization loans. But what are the differences between these two types of loans?? Let's take a closer look together:

Loan for modernization Installment loan
Amount Up to 100.000 euros Often only up to 50.000 euros
Interest More favorable than conventional loans Normal interest rate
Use fixed free

The modernization loan is often offered at more favorable conditions because the purpose of use is fixed. As a borrower, you must also prove that you are the owner of the property. This is considered additional security, so that the conditions for a modernization loan are more favorable. Nevertheless, modernization loans often do not require separate collateralization via the land register. So here you can easily apply for cheap money.

Compare modernization loans and save

Even if modernization loans from online banks often entail more favorable interest conditions, a comparison is still advisable . Here you first enter your loan request and some creditworthiness data and you will receive suitable offers, from which the most favorable modernization loan can be selected. In addition, you can also include other important performance characteristics in the search:

  • Particularly fast disbursement (fully digital application)
  • Free unscheduled repayments
  • Installment breaks

So if you want to save time and money, a loan comparison is a very useful solution.

2. Financing modernization with state subsidies

The very favorable modernization loans offered by many banks are an uncomplicated way to start increasing the value of your own property. For certain modernization measures, however, it is worthwhile to take a look at government subsidy programs beforehand. Especially in the field of energy modernization you can make your modernization much more favorable in the end. Below you will find an overview of the most common subsidy programs:

Energy-efficient refurbishment (KfW program no. 151 and 152)

This subsidy program is the core of the state subsidies in the field of energy-efficient renovation. First, you select whether the planned modernization measures should lead to a known energy standard as a package (KfW Efficiency House) or whether you are only planning individual measures. In the first case, you have access to loans at preferential rates of up to 120.000 euros available. Individual measures are financed with loans of up to 50.000 euros subsidized. Possible individual measures are:

  • Thermal insulation (walls, roof surfaces, basement and floor ceilings)
  • Renewal of windows and exterior doors
  • Optimization of your own heating system
  • Installation or modernization of a ventilation system

However, the possible repayment subsidy proves to be particularly attractive within the funding program:

Standard repayment subsidy
KfW Efficiency House 55 40 % of the loan amount (maximum 48.000 euros per residential unit)
KfW Efficiency House 70 35% of the loan amount (maximum 42.000 euros per housing unit)
KfW Efficiency House 85 30 % of the loan amount (maximum 36.000 euros per residential unit)
KfW Efficiency House 100 27.5% of the loan amount (maximum 33.000 euros per housing unit)
KfW Efficiency House 115 25% of the loan amount (maximum 30.000 euros per housing unit)
KfW Efficiency House Monument 25 % of the loan amount (maximum 30.000 euros per residential unit)
Individual measures 20% of the loan amount (maximum 10.000 euros per housing unit)

If your modernization work results in your home only consuming 55% of the primary energy required by the German Energy Saving Ordinance (EnEV), you will not need to take out a loan with an interest rate of 120.000 euros in the end only 72.000 Euro to be repaid. The bottom line is a significant negative interest rate. Alternatively, this funding can also be applied for as a pure grant (program no. 430). Here you receive up to 48.000 if a KfW efficiency house standard is achieved and up to 10.000 euros for individual measures.

Energy-efficient construction and refurbishment – Construction monitoring grant (KfW program no. 431)

So that you also safely achieve a KfW Efficiency House standard with your energy renovation, you normally need an expert. With this you plan together all measures and calculate the energy saving. KfW also subsidizes the use of an appropriate expert with a grant of up to 4.000 euros.

Age-appropriate conversion (KfW program no. 159)

Do you want to provide for your old age and convert your own four walls accordingly? In this case, KfW also offers a funding program. Here you get discounted loans up to 50.000 euros for accessibility measures or burglary protection. These include, for example:

  • Measures to overcome stairs and steps (such as stair lifts or ramps)
  • Bathroom conversion (ground-level shower, change in room layout)
  • Smart home measures (controllable lighting and shutters)
  • Installation of burglar resistant doors and windows
  • Burglar alarm systems

This subsidy program can also be used as a pure grant variant. In the variant barrier reduction (program no. 455-B) are up to 6.250 Euro possible as a grant. The area of burglary protection (Nr. 455-E) allows a grant of up to 1.600 euros.

Heating with renewable energies (BAFA program)

The Federal Office of Economics and Export Control (BAFA) now offers very generous heating subsidies . If you convert your heating system to renewable energies, you can receive an attractive subsidy that varies depending on the heating system you choose:

  • Solar thermal: 30% of eligible costs
  • Biomass: 35% of eligible costs
  • Heat pumps: 35% of eligible costs
  • Hybrid heating systems: 35% of eligible costs (for pure RE, 30% otherwise)

In addition, BAFA pays a surcharge of 10% of the eligible costs for each renewal if the heating replacement removes an oil heating system.

3. Modernizations are financially feasible

If you are interested in modernizing your own four walls, you have many financing possibilities. In addition to straightforward modernization loans from many online banks, very attractive government subsidies are still enticing for certain measures. Take advantage of these opportunities and save money while increasing the value of your property.