Renovating in 2021? A personal loan could be what you need

mother and son renovating house using personal loan

Are home renovations on your list this year’s to-dos? 


Depending on whether you are planning a whole house makeover or simply sprucing up the kitchen, the cost of your renovation is essentially up to you and your budget. 

If you’ve plumped up your savings and have enough to cover your planned reno, well done! But if not, you might want to consider your lending options to cover some of the costs: one being a personal loan

Why use a personal loan for a home renovation? 

A personal loan is a great way to help cover a renovation, and spread the cost over anywhere from one to ten years. 

There are two choices when it comes to deciding on a renovation loan: secured vs. unsecured and fixed vs. variable

Currently on the Mozo database, the average secured personal loan rate sits at 7.96% while the unsecured rate is a higher 10.26%. A secured loan requires you to put up an asset against the loan (like a car or your home) in return for a lower interest rate. Alternatively, if you opt for an unsecured option you may receive a higher rate but don’t have to risk any of your belongings as security. 

And what about fixed vs variable? Well, the choice is yours.  

Fixed rates
offer more certainty around how much your regular repayment will be as you lock in your rate for the entire loan. The downfall is that sometimes these loans come with hefty exit fees if you pay down your loan early. A variable rate loan however generally comes with more flexible repayment options and no early exit penalty. There is an element of risk though, as your rate can change with the market - meaning it can do down but also can be hiked up at any time. 

Want to start comparing loans for your reno? Check out some options on offer right now.

Compare personal loans - last updated 21 May 2022

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


    interest rate
    comparison rate
    Monthly repayment
    5.35% 19.09% p.a.
    6.14% 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.

  • 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.

  • Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    5.75% 25.99% p.a.
    6.68% 29.2% p.a.based on $30,000
    over 5 years

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 5.75% would cost $35,370.18 including fees.


Tips to setting your renovation budget

When renovating your home, it’s important to avoid going overboard and keep things within a realistic budget. While a swimming pool and tennis court might seem like a good idea at the time, you don’t want them to leave you swimming in deep debt for years on end. 

Here are some tips to keep in mind as you renovate in 2021:  

  • Renovate for profit: The primary thing to remember is that when you renovate your house you want it to increase in value for when you eventually sell it. Whether it’s removing walls to create a more ‘open-living’ space or adding a granny flat, think about what potential buyers might want from the property you have. 
  • Keep within your budget and set a repayment plan: Have a clear idea of how much you want to spend and stick to it. Similarly, make sure you have money ready to go to start making repayments on your renovation loan, you don’t want to be slapped with late fees or default on your loan and potentially lose assets over it.  
  • Choose a flexible loan option: Being able to contribute a lump sum to your loan is handy in the case you come into more money, such as a bonus at work. Make sure the loan option you are considering has features like free extra repayments, so you can put additional funds towards your debt whenever you want.  
  • Don’t fall into the DIY trap: If you aren’t a tradesperson, a DIY home reno is pretty risky. While the cost straight off the bat may be significantly less, the cost of repairs to any mistakes you make could outweigh the amount you’d pay for a professional.  

Want more on all things personal loans? Head over to our personal loans comparison page for more!

* 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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