KfW top-up loan: financing your share of a new heating system
The grant arrives after installation, the installer’s bill before it. The top-up loan bridges that gap, though not for any amount and not at the same rate for everyone.
Worked through by Radif Partners · Editorial policy · How we calculate
What the loan has to cover
Left to finance after the grant
€32,120
| Grant | €12,880 |
| Loan at most (eligible costs) | €28,000 |
| Left from your own funds | €4,120 |
| Extra interest discount | yes |
Interest discount up to €90,000 taxable income, for the home you live in only.
The KfW top-up loan (Ergänzungskredit) is a promotional loan for owners who already hold an approval for the KfW 458 heating grant or a BAFA notice for another single measure. It lends up to €120,000 per home, but no more than the eligible costs in the approval and notice, including the part the grant will later cover. Owner-occupiers of a single-family house or a flat with household income of no more than €90,000 receive an extra interest discount as loan 358; everyone else takes loan 359. You apply through a bank, not directly to KfW, within twelve months of the approval and before the grant is paid out. Example: a heat pump costs €42,000, an oil boiler is replaced, income is €70,000. Eligible costs are €28,000, the grant is €12,880. The loan can pre-finance up to €28,000; the remaining €14,000 above the cap needs other financing.
What the loan is for
The heating grant is paid only once the system is running and the evidence has been checked. The installer wants paying sooner. The top-up loan therefore covers not just your own share but, if you wish, all of the eligible costs, up to 100 % of them. When the grant arrives, you use it as a special repayment. The loan is part of the same guideline as the grant (BEG EM guideline, no. 8.1) and may expressly be combined with it, even though only one form of funding is otherwise allowed for the same costs.
You need a KfW grant approval or a BAFA funding notice under the single-measures guideline in your name. It must be no more than twelve months old, and the grant must not yet have been paid. If you start building and only then find money is short, act in time.
358 or 359: who gets which
| Loan | For whom | Feature |
|---|---|---|
| 358, top-up loan Plus | owner-occupiers of a single-family house or of a flat where only their unit is worked on, main residence, household income up to €90,000 | extra interest discount in the first fixed-rate period |
| 359, top-up loan | all other owners of single-family houses, landlords, owners of undivided apartment buildings | same terms, no extra discount |
| 359 for a WEG | owners’ association for work on common property | joint application by an authorised person |
For loan 358 the bank wants the same evidence KfW asks for with the income bonus: a land register extract, registration certificates of all relevant household members and their German income tax assessments for the second and third calendar year before the loan application. The €90,000 limit is well above the €50,000 limit of the income bonus, so households who get no bonus can still get the discount. The guideline only sets a maximum gap below KfW’s refinancing cost (no. 8.5.2). The KfW product page does not show actual rates at present.
How much the loan really covers
The loan amount is based on the eligible costs in the KfW approval and the BAFA notice combined. The €120,000 per home limit is generous, but it only bites when several measures are funded. For a new heating system alone, the grant’s cost cap limits the loan.
| Project | Cost | Eligible | Grant | Loan at most |
|---|---|---|---|---|
| Heat pump alone, oil boiler replaced, income €70,000 | €42,000 | €28,000 | €12,880 | €28,000 |
| the same heat pump plus roof insulation with a BAFA notice | €42,000 plus roof | €58,000 | KfW and BAFA | €58,000 |
| smaller heat pump, income €38,000 | €24,000 | €24,000 | €16,800 | €24,000 |
| two-family house, owner lives in one unit, income €120,000 | €50,000 | €43,000 | €16,340 | €43,000 |
In the first case €14,000 of the bill is above the cap. Neither the grant nor the top-up loan covers that part; it has to come from savings or an ordinary loan. The calculator above shows the gap after the grant, while the eligible costs set how much of it the promotional loan may carry. With the roof insulation the possible loan rises to €58,000, because the eligible costs of both notices are added together. In the two-family house the loan can exceed one home’s amount, because the cap of the whole building counts. Total replacement costs are covered under heating replacement costs.
Grant for your house
Grant
€15,680
| Grant rate | 56 % |
| Eligible costs | €28,000 |
| Your share | €16,320 |
Applying now, heat pump, guideline of 17 Aug 2026.
Term, fixed rate, repayment
KfW offers two forms. With an annuity loan you pay only interest during the repayment-free start years, then equal instalments. With a bullet loan you pay only interest throughout and repay the whole sum at the end.
| Term | Fixed rate | Repayment-free years |
|---|---|---|
| 4 to 5 years | 5 years | 1 |
| 6 to 10 years | 10 years | 1 to 2 |
| 11 to 25 years | 10 years | 1 to 3 |
| 26 to 35 years | 10 years | 1 to 5 |
| bullet loan, 4 to 10 years | whole term | whole term |
After the loan approval you have twelve months to draw it down, extendable to 36 months at most; from the 13th month a commitment fee applies. During the first fixed-rate period you can repay early at any time without a penalty, from the minimum amount given on the product page. That suits a grant that arrives some months after installation: it goes straight into a special repayment, and the term shortens.
How to apply
First comes the grant approval, as described under how to apply. You then take the approval to a bank or savings bank that arranges KfW loans, which KfW calls financing partners. No new consultation with the installer is needed; the grant application proves the project started on time (information sheet 358/359). Security is agreed with the bank. For a single-family house KfW accepts neither a joint application by several people nor a power of attorney for third parties, so even an owner living abroad deals with the bank in their own name.
One point concerns the tax office. Section 35c of the Income Tax Act rules out the tax credit for work financed with subsidised loans or tax-free grants. For a heating system that already gets the grant, that changes nothing. But if you finance another measure through the loan, keep it in mind for the tax credit. The loan is also open for heating optimisation with a BAFA notice. KfW 458 gives the overview of the heating grant, and the grant calculator shows the amount for your case.