Could a personal loan help you tackle rising renovation costs?

pregnant woman looks at paint swatches after getting a personal loan to cover rising renovation costs

Has having everyone home for Easter got you thinking about upgrading your bathroom, wanting to redo your garden or ready to reno your whole house?

Did you know that a simple reno could cost you more now than in the past two decades? Luckily, there are a bunch of low rate personal loan options that could help you cover the cost.

Recently released CoreLogic data revealed a national increase of 3.8% in the quarterly measure of residential construction costs, outpacing the Consumer Price Index of 0.8% for the same period.

The Cordell Construction Cost Index (CCCI shows this is the largest quarterly increase since Q3 2000, when construction costs increased 7% after the introduction of the GST.

There was a surge in dwelling approvals, which peaked in March, which are now breaking ground, leading to widespread demand for materials and trades.

Unfortunately, this swell in demand coincides with an ongoing global supply chain crisis caused by the pandemic, then made worse by instability and inflation caused by the geopolitical situation in Ukraine.

“The quarterly rate of growth in construction costs is happening everywhere and is not restricted to one city or state, it’s a national trend,” said Tim Lawless, CoreLogic research director.

“There was a much bigger increase in our index when the GST was introduced, however outside of that structural adjustment this is by far the biggest quarterly change on record. This would be the largest market driven increase we’ve seen.

“For anyone who is looking to build or to renovate, or for someone who owns a business involved in the residential construction industry, it means they are all likely to be facing significantly higher costs.”

Construction cost inflation could go for another 12 to 18 months, says CoreLogic

Lawless notes the ongoing inflation issue and says “it’s unlikely the industry can absorb a cost increase this significant into their margins and higher construction costs will ultimately be passed on to the consumer, placing further upwards pressure on the price of a new dwelling or renovation.”

No matter how big or small, the truth is renovating can require a bit of a cash injection, and that's where renovation personal loans can take some of the pressure off.

Want to start comparing loans for your reno? Check out some options on offer right now below or head to the best personal loans in Australia this month for Mozo Experts Choice Award Winners and editor’s picks.

Top renovation personal loans - last updated 14 May 2022

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure
  • Personal Loan

    Unsecured, Fixed, Excellent Credit

    interest rate
    comparison rate
    Monthly repayment
    6.39% p.a.to 7.89% p.a.
    6.39% p.a.to 8.49% p.a.based on $30,000
    over 5 years

    With low rates for borrowers with excellent credit, a quick 1 minute rate estimate and simple online application, there’s a lot to love about this loan! You’ll not only benefit from no exit fees, there are also no early repayment fees. You could qualify by simply earning above $25,000 and you’ll be on the way to start spending (other eligibility criteria may apply).

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 6.39% would cost $35,126.40 including fees.

    Details
  • Home Improvement Loan

    Fixed, Unsecured

    interest rate
    comparison rate
    Monthly repayment
    5.75% p.a.
    5.96% p.a.based on $30,000
    over 5 years

    Handypay offers flexible home improvement loans for Excellent Credit or better. Handypay is a specialist home improvement plan provider and offers loans up to $75,000.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $34,840.18 including fees.

    Details
  • Mozo Expert Choice Badge
    Personal Loan

    Unsecured, Fixed

    interest rate
    comparison rate
    Monthly repayment
    4.99% p.a.to 14.99% p.a.
    4.99% p.a.to 14.99% p.a.based on $30,000
    over 5 years

    Excellent credit score needed to obtain this rate. Enjoy no-fuss personal loans of up to $30,000 with Alex Bank. No hidden early repayment penalties. Terms from 6 months to 5 years. Convenient, 100% online approval. Must be over 18 to be eligible (other eligibility criteria may apply). Winner of Mozo's Experts Choice Unsecured Personal Loan award 2022^.

    Repayment terms from 1 year to 5 years. Representative example: a 5 year $30,000 loan at 4.99% would cost $33,959.97 including fees.

    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.to 19.09% p.a.
    6.14% p.a.to 19.99% p.a.based on $30,000
    over 5 years

    Fast, easy and 100% online, this is a low cost loan with no ongoing fees or extra repayment penalties. It's perfect for savvy borrowers with great credit. If you’re over 18 and earn above $30,000, you could qualify (other eligibility criteria may apply).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,832.61 including fees.

    Details

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. 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.

^See information about the Mozo Experts Choice Personal Loan Awards

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