Ask the Experts: financing a renovation with Steven Thompson

Steven from Bendigo Bank

Renovating has become increasingly popular in Australia. While it isn’t cheap, it can save you a lot of money on stamp duty and fees. 

What’s your reason for renovating?

The first question to ask yourself is why you’re renovating.

Are you designing your forever home, or are you adding value to a property that you plan to sell? Understanding your motivation will have implications on your budget.

Consider how much your renovation will cost

The next step is to start getting an idea of what your renovation will cost. The cost of your renovation will depend on a few things:

  • Whether it’s a simple cosmetic renovation or structural build work;
  • Whether you’re going to carry out the works yourself or pay professionals;
  • Your own personal taste – designer fittings will inflate your budget; 
  • Required permits and permissions;
  • The complexity of any structural work, and any risks along the way (e.g. asbestos);
  • How quickly you want the work complete.

And finally, on indirect costs like paying rent for alternative accommodation.

Ways to finance your renovation

There are several ways to finance a renovation.

The right solution for you will depend on your financial situation, the complexity of your renovation, and the outcome you hope to achieve.

Home loan top up

A home loan top up allows you to use the equity you’ve built up in your home by adding additional capacity onto your home loan.

However, you’ll need to be able to afford the additional repayments.

Home equity loan

A home equity loan allows you to borrow against the equity in your home via a separate loan facility. 

Construction loan

A construction loan works slightly differently.

It’s a structured loan that allows you to pay for building or renovation works in instalments at different stages of the build. 

Any advice provided in this article is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable product disclosure statement(s) on our website before acquiring any product.



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