Compare quotes from 10 lenders in 3 minutes
Renovations can be expensive. Before you apply for a personal loan, estimate the scope of your project and get multiple quotes from various contractors.
Picking the right option could save you thousands of dollars in interest and fees so before you even pick up a hammer it’s important that you give serious thought to how you’ll fund your renovations.
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Renovations, alterations and additions to your home will vary in cost depending on the scope of your project, the cost of labour and materials, and other facts. Before committing to a renovation loan, you will need to accurately scope the cost of your renovations.
Factors that can influence the cost of your project include:
In a recent release addressing home renovation loan costs by Australian lender, SocietyOne, which covers how to financially prepare for your next renovation, the lender details the average price of the most commonly renovated areas of a home.
|Area||Average Price||Common Costs|
|Kitchen||$10,000 - $45,000||Labour, appliances, fittings, flooring, structural changes|
|Bathroom||$10,000 - $35,000||Labour, tiling, fixtures|
|Bedroom||$2,000 - $35,000||Labour, structural changes|
|Living Room||$10,000 - $15,000||Labour, flooring, furniture|
|Outdoors||$2,000 - $10,000||Labour, landscaping, structural changes|
Best used for: home renovations under $50,000
Personal loans can be a simple, straightforward way to fund renovations. You can use the Money.com.au smart form to compare your options for home renovation loans in less than 5 minutes - see how much you can borrow and which lenders you qualify with, completely free of charge.
Home renovation personal loans have shorter terms than a mortgage or larger loan, with terms generally offered between three and seven years. Borrowing limits range from $2,000 to $75,000, and they may also have higher interest rates than home loans and construction loans.
Compare your available options before applying to determine which type of loan is most suitable for your project budget and personal financial circumstances.
Best used for: Large renovations over $150,000
Construction loans are designed to cover the expenses you incur when building or substantially renovating your home. They’re structured a little differently than regular home loans to make the process as simple as possible.
To apply, you’ll usually need a signed all-inclusive contract with a builder, including quotes and plans. After your lender approves your application, they will generally pay out funds in stages as needed to complete the construction. These payments will often be made directly to your builder.
During the building phase, construction loan repayments will generally only require you to cover interest charges, before reverting to a standard principal-and-interest mortgage once construction is complete.
It’s important to note that these loans are not built for small renovations and often have loan minimums of $150,000.
Every lender has different eligibility criteria for a home renovation loan, but the most basic qualifying criteria requires you to be:
The most important factor when gaining approval for a home renovation loan is to demonstrate your ability to repay the full loan amount to your lender.
If you meet the basic eligibility for a personal loan, you will then need to compare lenders and assess their individual approval criteria.
To get apply for a home renovation loan you will need to:
You will need to provide personal identification and financial documents (usually your bank statements or recent payslips), as lenders will need to assess your financial stability and determine if you can service the loan amount.
Check to see if you qualify for any of the government’s current grants for homebuilders and homeowners. You can find more information about available grants on the Australian Treasury website.
The best way to fund renovations depends on your financial circumstances and the cost of your renovations. Construction loans may be suited to large, high-cost renovations, while personal loans may be better for smaller, low-cost renovations.
Yes, you may be able to get a construction loan to renovate your home. However, you’ll need to supply your lender with a deposit of 5% or more, a signed building contract and quotes to as well as meeting their credit criteria.
In some cases, you may be able to open a line of credit without refinancing your home loan. Speak to your lender to find out more.