Australians have long been a nation of enthusiastic home renovators, with the COVID-19 pandemic resulting in a boom in home improvements as people unable to travel due to lockdowns spent much more time (and money) in their own backyards.
That desire for home renovation still continues and brokers are busy helping people to secure their home improvement finances.
The budget for home renovations can vary depending on the job, which can range from a kitchen or bathroom upgrade to building a major extension to the home.
If you need extra finance for your home improvement budget, a broker can take you through a variety of strategies to secure the finance required for the job.
These strategies can include refinancing your existing home loan using the equity built up in your property, which for some mortgage holders could be a substantial amount to pay for a big job. A broker will be able to explain how much of your available equity you can access when refinancing your home loan.
For smaller renovations such as a bathroom upgrade or replacing a deck, you could apply for a personal loan, which can be easier to obtain than other options. A personal loan will usually have a higher interest rate than your home loan with a much shorter repayment term.
If it is a major renovation, then a construction loan may be what you require. This is similar to a standard home loan, except the funds are released by the lender in stages as construction progresses to ensure you’re only paying for work that’s been completed.
Other strategies for financing a renovation can include having your existing home loan topped up, or using funds from a redraw facility. A broker can help with any strategy you favour to pursue your home renovation dreams.