Surplus value

They didn't have to renovate, but the 'gain' came naturally as the market got crazier and crazier, and higher amounts were paid.

You can monetize that surplus value in three ways:

Sell the house

You can sell the house and be happy with the hefty tax-free (!) profit. But that doesn't give you another roof over your head! Buying another home has also become expensive, and your earnings evaporate immediately unless you buy a cheaper home. If you have a lot of surplus value, this is an excellent opportunity to move into a more expensive house.

Financial engineering

Another way to use the surplus value is to have a conversation with the bank. The bank may be willing to grant you a lower interest rate if you can prove the surplus value (for example, using an appraisal report). After all, the bank runs less risk because of the surplus value and will always be able to collect the remaining debt in case of a possible forced sale. In amicable, formal banking terms, it is called that your Loan-to-Value value has decreased, which is the ratio of the remaining debt to the home value.

Borrow more money

A third way to cash in on your excess value is to borrow more money from your bank to make the house more sustainable, for example. The residual debt will decrease, but so will the appraised value, so the LTV ratio described above will probably remain the same. A sustainable house is more economical, so you save on heating costs.

A mortgage loan can never be more than the value of a home. This is because the tax authorities are also watching. But, of course, the deductibility of interest charges is not meant for a loan that has nothing to do with the home.