Are you eager to transform your adorably outdated property into the home of your dreams? With escalating property prices in various markets, opting for a renovation might be a more feasible choice than embarking on the quest for a new property.
Whether your vision involves turning your garden into a tropical oasis, updating a 1960s bathroom, or giving your retro blue kitchen a modern touch, there are diverse avenues to finance your renovation.
Utilise Your Equity
Your equity is the disparity between your property’s value and the outstanding mortgage amount. For instance, if your property is valued at $1 million and you owe $500,000, your equity is $500,000. Typically, borrowers can access up to 80% of their home’s equity, but this varies among lenders. If you exceed 80%, you may be required to pay lenders’ mortgage insurance. If you’ve made progress on your mortgage or your property’s value has increased, exploring the use of your equity for renovation funding could be advantageous. We can guide you on potential top-ups to your existing loan and their impact on repayments, interest, and loan term.
Refinance Your Home Loan
Consider refinancing your home loan, either with your current lender or a new one, to unlock additional funds for your renovation endeavours. We’ll assess the potential benefits of refinancing and outline any associated costs.
If you possess a redraw facility and have been making extra repayments on your home loan, you might be able to redraw those funds for your renovation needs. Keep in mind that access is limited to the additional payments made, making this option more suitable for smaller renovations.
Take Out a Construction Loan
For extensive renovations involving knock-down rebuilds, extensions, or major structural changes, a construction loan may be a fitting choice. Unlike regular home loans, construction loans release funds in stages as the project progresses. During construction, interest-only repayments are common, transitioning to principal and interest repayments once the renovation is completed.
Apply for a Personal Loan
Smaller renovation projects can be financed through a personal loan. Secured loans involve using an asset, like a vehicle, as collateral, typically offering lower interest rates. Unsecured loans, which don’t require collateral, may have higher interest rates, lower borrowing limits, and shorter repayment terms.
Ready to Begin? Renovating not only enhances your property’s value but also elevates its comfort. Whatever your renovation aspirations, we’re here to navigate the financial aspects and kickstart your project. Reach out today for personalised financial advice tailored to meet your unique needs.