Personal loans to cover rising home renovation costs

Aussies are still renovating their homes despite rising costs, as having a comfortable living space takes priority.

In fact, a 2023 survey conducted by leading home renovation and design platform, Houzz, showed 41% of homeowners in 2022 had plans to renovate and were finally able to afford it. 

But while savings were cited as the top reason 79% of respondents were able to fund their home renos, this isn’t the only option. 

If you don’t have the money to front these upgrades entirely, a personal loan could help you get the job done.

Handling the cost of a reno

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

Houzz says that the median annual renovation spend has increased year-on-year. And in recent years since the pandemic, spending hit $35,000 in 2022 compared with $30,000 in 2021, and $21,000 in 2020 - that’s a $14,000 jump in the span of 2 years!

And keep in mind that the planned budget doesn’t always reflect the actual cost, as unexpected events could pop up during a reno. This might include more materials and labour being needed to renovate a space than previously thought, so it’s a good idea to budget for extra in case it’s needed.

Help from reno companies

Unsurprisingly, the surge in renos has led to demand growing for home professionals. Homeowners are hiring help for their renovation projects more than the year prior (94% versus 91%). This is no doubt further driving up the price of construction, as there are typically fewer tradies to go around.

So if you feel your renovation could use a bit of funding assistance, a personal loan might be a way to take some of the pressure off.

Take Omm’s Low Rate Personal Loan, for example. Borrowers may benefit from their low fixed rates which start from 6.57% p.a. (comparison rate 7.19% p.a.*) on loan values up to $75,000. So if you were to borrow $20,000 over the course of 3 years at a rate of 6.57% p.a., your monthly repayments would be $614 with the total interest payable being $2,090 - not a bad offer, when you consider the current average fixed rate for an unsecured personal loan is ^10.58% p.a. in Mozo’s database. Similarly, you’d get a similar result from Harmoney’s Unsecured Personal Loan, with fixed rates starting from 5.76% p.a. (6.55% p.a. comparison rate*).  

Want to start comparing loans for your reno? Find out some of the best personal loans that our experts at Mozo have tracked this month, or compare your top options below!

^Rates are correct as at 6/12/2023 and are calculated using $10,000 loans as an example, with the best credit score data available to Mozo.