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Renovation Loans & Financing

Date: 20 December 2018

Renovation loans and financing


Renovating your home not only increases its value, but it gives you the feeling of living somewhere new again. And if you don’t have all the money you need on-hand for financing your renovation, there are still a number of options that can help you realise your goal.


Whether it’s a new kitchen, bathroom, living room or deck, upgrading a space opens up opportunities to enhance your lifestyle. But before deciding on finance, however, it’s important to shop around and do your research.


What options do I have?


Depending on the scale of your project, or the amount of time you intend on living in your home once the project is completed, refinancing your mortgage could be a solution. If your current loan has enough equity your lender may let you borrow the amount on a line of credit or an offset account.


It’s important to note that refinancing is essentially the same as taking out a new loan, so be sure to look around for a competitive interest rate.


For relatively smaller projects, taking out a personal loan or paying the costs with a credit card might be a better option. Personal loans can be secured against different assets, such as your property or term deposits, while credit cards can be approved by your bank on the spot. 


Paying with a credit card for jobs is simple, but that convenience does come with a price. Interest rates are often around 10% or higher, so it’s important to factor in the length of your project because you don’t want its repayment value ending up more than what it’s worth.


One way to get a combination of both a credit card and a personal loan is a Q Card. By applying for pre-approved finance, you can receive 12 months interest-free on Renovate It jobs that cost over $5000 and pay for anything, not just renovations, with a physical card.


Important considerations


Before applying for finance, it’s important to spend time planning your project with as much detail as possible. Working out everything you’ll need, who can install it or do the work, how long it will take and how much it will cost are no-brainers.


Setting a budget from the outset is also key, especially when it comes to borrowing money. A good idea is to allow a buffer of about 10% to account for any jobs that run over or surprises that pop up along the way.


Checking with your insurer to make sure any work won’t jeopardize your policy is also a smart move, because your policy may change after work is completed. If you’re planning to sell after your project is complete, it’s also worth seeking advice from a valuer to make sure you aren’t investing more than your property is worth. 


Once the job is finished, it’s in your best interest to pay it off as soon as possible. Organising your finances before the project is finished gives you the greatest chance of getting on top of repayments.

Renovating to add value guide