Homeowners stay put as renovation activity heats up

Tom Watson

07 Sep 2017

redactor/hero-images/98/Home_Renovation_FINAL_content.jpg

The number of Australians making renovations to their homes during the June quarter grew by 2.2 per cent according to the Housing Industry Association, while new dwelling construction declined.  

Mozo’s home loan and property expert Steve Jovcevski said that the increase in renovation activity is a sign than many homeowners are turned off by high housing prices and stamp duty costs.

“It doesn’t surprise me that homeowners are opting to renovate rather than sell up,” he said.   “When you consider that on a $750,000 home in NSW you could pay around $29,000 in stamp duty, it’s no wonder people prefer to funnel that money into renovations on their current home instead of the government’s coffers.”

And the good news for renovators is that home lenders this spring are keen to attract mortgage holders wanting to tap into the increased equity in their home to fund renovations.   

Since June 1, 29 lenders have made cuts to both fixed and variable home loan rates for owner occupiers, with rates as low as 3.54% for refinancers with an LVR of 80%. Check out a range of top refinance home loans currently on the market below, or for ideas on renovation trends head over to our renovation guides hub.

Top 5 Refinance Home Loans - rates updated daily

  • Promoted

    UBank

    3.59% p.a.

    3.59% p.a.

    $1234

    Product details Close details
    Go to site
    UHomeLoan - Discount Offer

    Enjoy a low rate & no bank fees (on variable loans) from one of Australia's leading digital banks. Easy & fast to apply, you'll get free redraw with flexible repayments. Min. 20% deposit required. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.

    • $0.00

    • $0.00

    • yes - free

    • yes

    • no

    • 3.59% p.a.

    • 3.59% p.a.

    • $0

    • 80.00%

    • $200,000

    • $699,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

    Go to site

  • Promoted

    Athena

    3.59% p.a.

    3.55% p.a.

    $1234

    Product details Close details
    Go to site
    Variable Home Loan

    With low rates, no fees, and automatic rate match, new-comer Athena wants you to love them and leave them. Refinance only. Minimum 20% deposit.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 3.59% p.a.

    • 3.55% p.a.

    • $0

    • 80.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Variable Home Loan

    Go to site

  • Promoted

    Hot Deal Upfront fees waived (Apply by 28 June 2019 – T&Cs apply)

    Homestar

    3.49% p.a.

    3.49% p.a.

    $1234

    Product details Close details
    Go to site
    Star Essentials Home Loan

    A super low rate home loan packed with the essentials. No application or ongoing fees. Unlimited additional repayments. Free online redraws when that holiday beckons. For a limited time, refinancers can save more with up to $515 third party upfront fees waived – so get in quick! Loan size $200k to $750k, no construction loan.

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 3.49% p.a.

    • 3.49% p.a.

    • $0

    • 80.00%

    • $200,000

    • $749,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Star Essentials Home Loan

    Go to site

  • Promoted

    Bank of Queensland

    3.99% p.a.

    4.15% p.a.

    $1234

    Product details Close details
    Economy Home Loan

    Take advantage of a low variable home loan interest rate with free redraw and flexible repayment options. There is no minimum or maximum loan amount so it’s suitable for everyone from first home buyers to luxury property moguls.

    • $10.00 monthly

    • $320.00

    • yes - free

    • yes

    • no

    • 3.99% p.a.

    • 4.15% p.a.

    • $450

    • 80.00%

    • -

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Economy Home Loan

  • Promoted

    loans.com.au

    3.48% p.a.

    3.50% p.a.

    $1234

    Product details Close details
    Go to site
    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount.

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 3.48% p.a.

    • 3.50% p.a.

    • $520

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Home Loan

    Go to site

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

Steps to refinance to fund a renovation

Step 1. Work out a renovation budget. Whether you get professional help from an architect, landscaper or builder to work out how much you’ll need to do the changes to your home that you want, or you just work backwards from a lump sum amount you think you can afford, having a budget in mind before you speak with your lender or do any of the work is super important.

Step 2. Compare home loan deals.  Before you just get in contact with your existing home lender to discuss your renovation budget, it’s a good idea to compare rates from other lenders in the market. Not only will this help you when negotiating with your existing lender if you decided to refinance with them, it will also help you get up to speed on new features or options that may not have been available when you first took out your home loan. Mozo’s Switch & Save Calculator is a good place to start - it compares over 100 home loans in our database that are available now.

Step 3. Refinance. Once you’ve found a home loan that ticks the boxes for you, you can kick off your refinancing application. Be sure that you’ve also done your homework around any mortgage discharge costs or upfront costs that you might need to pay when switching home loans.

Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.

The new online loan trend that could save you a fortune

5 killer lenders taking on the big banks in 2019

Tell me more

APRA to change home loan assessment guidelines, but is it for the best?

Loans.com.au announces rock bottom 3.48% fixed home loan rate

Tell me more

Home loan discount frenzy drives bargains for borrowers

ME jumps on the bandwagon, cuts rates for owner occupiers and investors

Tell me more

Four in five home borrowers make $18,000 mistake

Lowest in the market: online lender Tic:Toc slashes variable rate to 3.47%

Tell me more

Prime Minister promises Aussie first home buyers would only pay a 5% deposit if his government was re-elected