Thinking about a bathroom makeover, a kitchen upgrade, or some landscaping for your home in 2025? It’s important to know your renovation finance options. Let’s explore some ways to fund your home improvement project.
Home renovation spending has surged over the past five years, and it looks like the trend is continuing.
According to the Housing Industry Association, high property values are giving Australians more home equity and confidence to pursue home improvements at near-record levels.
This is exciting, as home improvements can enhance both your lifestyle and your home’s value.
Here are some renovation loan options that could help turn your home into your dream space:
Use Your Offset Account or Redraw If you have cash in a home loan offset account or have been making extra loan repayments, you might have funds available through redraw.
These funds could help finance your renovations.
However, it’s important to discuss with us first to understand the potential impact on your home loan.
Savings in an offset account or extra loan repayments can reduce your loan interest, so it’s wise to calculate the numbers before using these funds.
Top Up Your Existing Home Loan With sufficient home equity, you might be able to borrow extra through a loan top-up on your existing home loan.
This option can be simpler than switching lenders, but be aware that some lenders may charge fees for a loan top-up.
Refinance to a New Loan Refinancing to a new loan is another way to access renovation funds.
Your current loan might not have a competitive interest rate or the features you need.
Refinancing can leverage any additional home equity you’ve gained, providing the funds for renovations.
Plus, you might benefit from interest rate savings and more flexible loan features.
Consider a Construction Loan For major projects like a new extension or a knock-down-and-rebuild, a construction loan could be ideal.
Construction loans are designed for renovation and building projects.
Funds are released in stages as each part of your project is completed. You only pay interest on the funds drawn down, and during the building phase, you typically make interest-only repayments, which can save on interest costs.
Some lenders may even offer pre-approval for construction loans before you’ve chosen your builder.
Pre-approval can help you understand your budget for renovations, aiding in project planning.
Understand Your Options It’s tough to plan a renovation without knowing your budget.
If you want a clearer idea of what’s possible for your 2025 renovation plans, contact us today. We’ll help you get started on your project.