Home Renovation Loan

Home Renovation Loan

A home renovation loan is often taken to fund renovations and improvements to an existing property. Many existing homeowners are choosing to renovate instead of buying a new home, due to the smaller costs involved. A Renovation Loan enables homeowners to stay in their own home and enjoy an improved lifestyle. It is usually cheaper to renovate than to buy a another home of the required standard and lose money through selling and moving, due to the fact that house prices have doubled in Australia over the last 3 years.

Depending on the lender, you can secure the loan either on the current value of the home, or the forecast value once the renovations are completed.

You may be able to redraw from your existing loan and save on the costs associated with new credit assessments and valuations.

Loan Terms
The renovation loan will probably be a standard variable rate or a line of credit loan. A big advantage to most variable rate loans is that you can usually make additional or extra repayments without a penatly fee.

If there is sufficient equity in your home, this may be all that is required by the lender to advance you the fund for the home renovations. Alternatively, the lender may use the increase in value of the property resulting from the home renovations as loan security. If the amount being borrowed is relatively small, you may be able to use some other asset as security such as stocks or a car.

Repayment Options
You may choose to repay either weekly, fortnightly or monthly to suit your personal circumstances.  The more frequently you repay the less interest you will pay as you will make more repayments over the course of the loan.

Interest Rates
The interest rate will traditionally be the same as the standard variable rate.  

Loan Features
Other useful features can include offset accounts, a split loan facility, redraw facility, direct salary crediting, portability and repayment options.


Know your options when it comes to paying for renovations.  Talk to a local mortgage broker today by calling or submitting your details on line.  Get great home renovation house loans advice with us.

 

With interest rates coming down, now is the time to speak to a mortgage broker. We know which banks are dropping rates and who is raising.

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