Financing a home renovation with a personal loan

Whether you're dreaming of a kitchen upgrade or a new deck, Mozo's expert personal loan comparisons can get you started. Compare personal loans below!

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Renovation loan comparisons on Mozo

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Last updated 30 October 2024 Important disclosures and comparison rate warning*
  • Low Rate Personal Loan

    Excellent Credit, $5,000 - $75,000

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 8.39% p.a.
    7.19% p.a.to 8.75% p.a.based on $30,000
    over 5 years

    Competitive low rates for borrowers with excellent credit on 1-7 year loans from $5,000 up to $75,000, plus free extra repayments. Winner of Mozo's Experts Choice Excellent Credit Unsecured Personal Loan 2024 and Excellent Credit Secured Personal Loan 2024 awards ^. Min. income of 25k after tax, to apply.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
    Details
  • Unsecured Personal Loan

    Fixed

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

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,430.23 including fees.

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    Details
  • Unsecured Personal Loan

    interest rate
    comparison rate
    Monthly repayment
    6.99% p.a.to 24.99% p.a.
    6.99% p.a.to 22.79% p.a.based on $30,000
    over 5 years

    Competitive fixed rates for borrowers on 1-7 year loans from $5,000 up to $50,000. $0 monthly fees and no early repayment fees to pay. Fast application process on the Revolut app. According to Revolut and subject to loan approval, you'll receive your money into your Revolut account straight away.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.99% would cost $36,132.67 including fees.

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    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    5.76% p.a.to 24.03% p.a.
    6.55% p.a.to 24.98% 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 5.76% would cost $35,173.52 including fees.

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    Details
  • Debt Consolidation Loan

    interest rate
    comparison rate
    Monthly repayment
    5.76% p.a.to 24.03% p.a.
    6.57% p.a.to 24.99% p.a.based on $30,000
    over 5 years

    Roll multiple debts into one loan to streamline your finances with one set of repayments and one interest rate. Competitive fixed interest rates with no monthly or early repayment fees and flexible repayment options. Easy online application and funding in as little as 24 hours (subject to approval).

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.76% would cost $35,173.52 including fees.

    Compare
    Details
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Reviews, news, tips and guides to help find the best personal loan for you.

What is a home renovation loan?

A renovation loan is much the same as any other personal loan, but instead of paying for a new car, a medical procedure or a holiday, it’s specifically used to improve your home.

Home renovation loans allow you to borrow a lump sum of money, paid back over a set term along with interest and any additional fees. 

Let’s take a closer look.

How much do home renovations cost?

It depends on your plans. Home renovations can cost you anywhere from a couple of thousand for a quick paint job, to the million-dollar projects you’ll see on Grand Designs

A recent Domain article noted that costs have gone up for renovations in recent years, though not due to materials but labour costs. The cost of tradespeople rose by 4% between 2023 and 2024, according to the Housing Industry Association.

Data from Suncorp (2022) shows that the average spend on home renovations also varies from state to state. The national average is roughly $63,118, while some states spend much more than others on home improvement. Consider these figures:

  • VIC: $71,067

  • TAS: $67,416

  • NSW: $66,609

  • QLD: $60,560

  • ACT: $58,466

  • WA: $54,377

Of course, your costs will depend on the size and scale of your renovation. Here are some common uses for renovation loans to help you weigh their suitability to your project:

    • Swimming pools
    • Kitchen renovations
    • Bathroom remodelling
    • Solar panel installation
    • Extensions
    • Added storage
    • Landscaping
    • General repairs.

How much can I borrow for my renovation?

There’s no way to answer this for everyone, but a few factors will determine how much you can borrow.

These include: 

How your personal finances are assessed by the lender.
How much your choice of lender is willing to lend. (Most cap unsecured loans at around $50,000 to $60,000. Secured loans can come with bigger amounts of up to around $100,000).

What type of renovation you’re doing. This will help determine which loan is most suitable. A finance expert should be able to advise you if you’re unsure. 

Let's run through a quick example and use the Mozo calculator to help illustrate how much you might need.

Home renovation type: Bathroom revamp, new sink, shower and tiles.

Proposed cost: $30,000

Savings designated: $8,000

Renovation loan needed: $22,000

Borrowed amount: $22,000

Interest rate offered: 10.35% p.a.

Loan term: 5 years

Monthly repayments: $471

Total interest paid: $2,674

Total loan cost: $24,674

Keep in mind that a lower interest rate can help bring down your costs, so it’s worth shopping around. Also, while a longer loan term can bring down your immediate monthly repayments, it will usually increase your total repayment amount.  

💡Smart tip: It’s quite common for homeowners to use extra money paid into their home loan to help fund a renovation. To do so, your home loan needs a redraw facility, which gives you access to this extra money. Just remember, if you choose to withdraw money from your available redraw, your home loan balance, repayments and the time it takes to pay off your loan will all increase. 

How to choose a home renovation loan?

There are a few things to focus on when deciding on a renovation loan, including the interest rate, fees and the loan term. Let’s break these down further.

  • Interest rate: Interest can be fixed or variable and it’s worth noting the impact of interest on your total amount repaid. Keep an eye on the comparison rate*, which factors in the interest rate and the fees you’ll be charged with a specific loan. This usually gives you a more accurate idea of the full cost of the loan. 

  • Fees: All loans have fees attached, and you can save a lot by watching out for loans with hidden fees. You will almost always find an application fee for a loan, but there can also be fees for late payments, early payments and redraws.

  • Loan term: Most personal loans last between 1-7 years, and this impacts how much interest you will pay. The shorter the length of your loan, the less interest you’ll pay - but the more your regular repayments will be.

  • Extras: Being able to make extra repayments or having a flexible repayment schedule can help pay off your loan earlier and save on interest. Keep in mind that some loans have early break costs, which might make this less attractive. 

What types of home renovation loans are there?

Several factors will help determine the kind of renovation loan you’re selecting. Let’s run through them briefly below:

Fixed rates: These rates stay the same for the life of your loan, making it easier to budget for. This is an attractive option if you're worried about a rate hike down the track, but tend to be higher and can have more rigid loan conditions alongside them.

Variable rates: These rates are subject to change over the course of the loan. This can mean they’re generally lower and can come with more flexible features (like early repayments and redraws). But interest rates can also rise over time. 

Secured: These loans can have lower interest rates, but they require an asset as collateral. This means a car, a property, or some other valuable possession is put up against the loan, and if you default, this asset can be repossessed by the lender.

Unsecured: These loans don’t require an asset against them. Instead they’re dependent on your credit score and a risk assessment of the lender. Unsecured loans tend to have higher interest rates but also don’t put your property (or another asset) at risk.

Green loans: If you're doing renovations to make your house more environmentally friendly or to use less energy, you may qualify for a green loan. While these all have different requirements, they are useful for adding things like solar panels, insulation, or rainwater tanks.

How do I apply for a home renovation loan?

The application process will differ from loan to loan. You'll generally need to show evidence of your financial standing and history for the lender to make an accurate risk assessment. If you have good credit, you should be able to apply without issue.

It’s a good idea to work out how much you can potentially afford to borrow first. Our loan repayments calculator can help with this. You can also check out the best personal loans as determined by our Mozo experts to start comparing options.

The last word: Other reno costs to keep in mind

Home renovation plans are great, but the costs can actually be quite difficult to predict. While you might set out to spend $25,000, it’s very easy to get wrapped up in renovations and find yourself going over budget. 

Whether it’s pricey custom cabinetry or new plumbing that isn’t adding up, it’s best to build a buffer into your budget. As most renovation costs coincide with labour costs, you’ll also find that the longer things take, the more the bill can mount.

However, if you’ve done your homework and crunched the numbers, it’s time to find a renovation loan. Simply jump back up to the table above and start comparing some of the top loans in the Mozo database.

*Note that the comparison rate is generally based on a set scenario (i.e. either a $30,000 loan paid off over 5 years or a $10,000 loan paid over 3 years), so your actual loan will vary in its specifics.

Picture of JP Pelosi
JP Pelosi
RG146
Managing editor

Managing Editor Jean-Paul (JP) Pelosi leads the editorial team, with over 20 years of experience writing for top outlets like The Guardian, The Sydney Morning Herald and News.com.au. JP's expertise in home loans and property is complemented by his rich background at major financial firms including CommBank, Suncorp and Amex. Holding a Master's in Communications and international experience in journalism, JP combines passion with skill and has a unique ability to apply this editorial experience and financial knowledge to advise the team on how to create engaging financial content for Australian consumers.

FAQs

Personal loan vs. renovation loans: Is there a difference?

For the most part, no. Personal loans can be used to finance a number of things, such as holidays, motorcycle purchases and even medical debts. They are quite versatile and so personal loans have been a popular choice to pay for small-to-medium scale renovations, too. If you’re looking to fund larger renovations, refinancing your home loan or taking out a construction loan might be more suitable.

What should I look for in a renovation loan?

When choosing a personal loan to renovate your home, there are a few key things you’ll want to look for, such as:

  • Competitive interest rates

  • Low fees

  • Flexibility on repayments. 

How much will a renovation loan cost me?

You can use Mozo’s renovation loan calculator to figure out what your weekly, fortnightly or monthly repayments might look like and how much you can expect to pay in interest in total. Keep in mind that in order to keep your repayments low, your first step is finding a low rate renovation loan.

How can I get the best home renovation loan rate around?

Once you’re ready to make your reno dreams a reality, your next step is to snag a competitive interest rate. Here are some quick tips:

  • Keep your credit in good shape

  • Simply ask for a better deal

  • Compare your loan options.

Are renovation loans different for new home buyers and for existing homeowners?

If you’re a first-time home buyer who has just taken on a large debt in the form of a home loan, it might be hard to secure a separate renovation loan. Of course, each person’s financial situation is assessed on its own merit. 

If you’re a long-time homeowner, you might have more options. For example, you could get a secured loan by using your home as an asset, which will generally have a lower interest rate. You would also typically have the option of an unsecured loan if you prefer.

Can I still get a home renovation loan with other debts?

Most Aussies are carrying some form of debt, whether that be a mortgage, credit card debt or car loans. As long as you’re staying on top of repayments and keeping your credit in top shape, getting renovation loan approval should be fine.

To improve your chances of getting approved however, here are some tips:

  • Start small, don’t ask for too much.

  • Don’t apply too many times.

  • Prove your reliability, show steady finances.

Personal Loan Reviews

MONEYME Debt Consolidation Personal Loan (Debt Consolidation)
Overall 1/10
Avoid like the plague

They emailed my broker a reply they only get when you have gone belly up. I asked for a loan for consolidation but denied me on the 11july, same week another company done it the same day and I've saved alot. Since then My broker went through them today and they wrote a distaste full email without reason, when I have never defaulted. Never use this company.

Read full review

They emailed my broker a reply they only get when you have gone belly up. I asked for a loan for consolidation but denied me on the 11july, same week another company done it the same day and I've saved alot. Since then My broker went through them today and they wrote a distaste full email without reason, when I have never defaulted. Never use this company.

Price
1/10
Features
1/10
Customer service
1/10
Convenience
1/10
Trust
1/10
Less
Unknown, Queensland, reviewed about 13 hours ago
St.George Secured Personal Loan
Overall 10/10
Good service

Easy access; not bureaucratic.

Read full review

Easy access; not bureaucratic.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Ana, New South Wales, reviewed about 12 hours ago
ANZ Unsecured Personal Loan
Overall 6/10
I would like to know more

My bank is not very easy to deal with! I am looking to change banks at some stage

Read full review

My bank is not very easy to deal with! I am looking to change banks at some stage

Price
4/10
Features
4/10
Customer service
5/10
Convenience
6/10
Trust
5/10
Less
Sue, Victoria, reviewed 22 days ago

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