More Aussie homeowners are renovating: 6 ways to finance your reno

Woman painting wall

Interest rates have climbed over the last 12 months and Aussie homeowners have felt the pinch. 

One approach in this market has been to try and improve the value of your home above all else.

Managing director of Resolve Finance, Don Crelin says that for some homeowners adding value to their home is more attractive rather than selling in an uncertain market.   

In fact, more than one in five Aussie homeowners are planning to extend their mortgage or borrow additional money to renovate over the next 12 months, according to the latest research conducted by Resolve Finance.   

The research was conducted among 1,000 Australian homeowners, and also found that despite uncertainty about interest rates, homeowners are almost twice as likely to be planning to sell to upsize than downsize over the next 12 months. 

“Our own brokers have noticed an increase in requests from their clients to extend mortgages or to take out additional loans for renovations,” he says. “There are significant costs such as stamp duty when moving, however renovation costs have also soared, so it needs to be a well thought out decision.

“To move or improve is the age-old question with no simple answer.”

If you’re thinking about renovating your home, there are a few ways to budget and finance the task. 

So, here are 6 ways to help fund the renovation of your dreams:

1. Stack up your savings 

The first and most obvious answer is to build your savings up. If you have the funds set aside before starting, this can help you avoid paying interest on other financial options.

2. Benefit from your built-up equity 

If you’re the homeowner, you can use the equity you have built up in your home to borrow more money from the bank. What’s equity? Equity is the difference between the value of your property and the amount you still owe on your home loan. Whether you can borrow additional funds to access the equity in your home, depends on things such as your income, living expenses and how much you owe.

3. Reap your redraw 

If you have made additional payments on your home loan, you can sometimes access some of these funds through a home loan redraw facility - should your provider offer it. But note that this approach isn’t for everyone because it may impact your overall loan repayments.

4. Top up your home loan

A top up allows you to borrow more money on top of your existing loan and can be a lower interest alternative if it is available to you. In short, a home loan top up lets you borrow against the home equity you may have built up in your property, which can be used to fund another goal like a reno.

5. Make more progress with a construction loan 

You can take out a construction loan for larger scale renovations and it allows you to draw money from the loan as you go. Construction loans give you flexibility. You can draw down the loan at various stages of your build, for example, and these are known as progress payments.

6. Or try secure a personal loan

A personal loan is more suitable for smaller renovations and can be a fixed or variable rate. Though there are a range of things to consider first, such as what’s the scale of the reno? Are you repainting, upgrading, adding on or starting a DIY project? Do you expect your borrowing costs to come in between $4k and $50k? Would you prefer a secured loan where you offer your lender an asset as security or an unsecured loan which usually has more flexibility?

Choosing the right personal loan requires a little bit of research, which is where we can help. Start comparing some of the best personal loans below to help you on your way to a new reno!

Personal loan comparisons on Mozo - last updated 3 December 2023

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    Unsecured Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    6.75% 26.95% p.a.
    6.75% 26.95% p.a.based on $30,000
    over 5 years

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    6.55% 24.98% p.a.based on $30,000
    over 5 years

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* 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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