Homeowners stay put as renovation activity heats up

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 - last updated 21 May 2024

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  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

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    Details
  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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  • Elevate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.20% p.a.

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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    Details

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.

* 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.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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