Financing your home renovation
When you need more space or want to upgrade your current home environment, renovating can be the answer. But you need to be aware that this can be expensive and might end up costing you more than you think.
Planning ahead is crucial, and you will need to:
- work out if your renovation is structural or non-structural (if an extension is structural it may need council approval and permits)
- decide what you can and can’t afford
- consider how you’ll finance the renovations – from your savings or from a loan.
There are two types of loans that you can take out to cover your renovations.
- A home improvement loan allows you to use the equity you already have in your home to borrow more and make your home improvements.
- A line of credit means that you can use a single account for your home loan and your everyday spending. The limit on the line of credit is fixed and doesn’t reduce as you repay the loan. You can make purchases directly from the line of credit and you can use a credit card that’s automatically paid off each month by the line of credit loan.
Talk to your mortgage provider to work out which financial solution is right for your renovation plans.