
Get exclusive money-saving offers and guides
Straight to your inbox
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Home improvement loans (or home renovation loans) are a form of finance with arguably some of the greatest investment potential. Renovating your home has the advantage of potentially adding serious value to your property as well as making your home a more beautiful, sustainable, functional or modern place to live.
Home is where the heart is – but whether your renovations are a desire of the heart or a complete necessity, you'll want to avoid giving yourself heartburn over the dent to your bank account. This is where home improvement loans can help.
From
fixed rate
From
comparison rate
100% confidential application
An unsecured personal loan up to $50,000. You'll receive a tailored interest rate between 6.99% p.a. and 24.79% p.a. based on your risk profile.
From
fixed rate
From
comparison rate
100% confidential application
Get access to a car loan from $2,000 to $100,000 on terms of 3, 5 or 7 years. Rates are tailored to your loan term and securing the loan is optional.
You can use a home improvement loan for any number of common or less common renovations. Renovating a home can be a daunting task, given that there are so many options. That's why it's a good idea to start by identifying exactly what you want to accomplish – be it changes to styling, structure or functionality.
Installing solar or energy-efficient hot water systems can make your home much more energy efficient, and if your home doesn't have suitable solar access, you can think about getting an active solar heating system. Try to improve the flow of natural light and use LED lighting to replace low-efficiency lighting.
You can also choose to improve your home's heating, cooling and air quality. This aspect can be tricky and involves paying attention to windows and glazing, ventilation, thermal mass and insulation. You might want to turn to a heating and cooling system that comes with high energy-star ratings.
It is worth noting that there are types of loans, usually known as "green home loans" or "green personal loans", that are specifically designed to help you make your home more eco-friendly and energy efficient. You may find that these loans have lower rates than typical home improvement loans, but they will likely come with a specific set of requirements in regard to the eco-management of your renovations.
If you're looking to improve your property, you have a few different options when it comes to renovation finance. Consider carefully which type of loan could be best for your circumstances:
Unsecured personal loan | An unsecured personal loan is simply a loan that you can use to finance anything you like, such as a holiday, a car or home improvements. These loans usually come with higher rates and fees than secured loans because they are not secured against an asset, making them a greater risk to the lender. |
Secured personal loan | A secured personal loan lets you borrow money by putting up an asset as a guarantee. If you're looking at doing improvements on your home, you can attach your house as security. If you have a mortgage, you can use the equity in your house as a guarantee. Just remember the amount of equity you have has to be more than the loan amount. |
Green loans | A green loan is specifically a personal loan for green and sustainable home updates. These loans generally have financial incentives such as lower rates and flexible repayment terms, but they are more restrictive in terms of what they can be spent on. Green loans may be secured or unsecured. |
Mortgage finance | If you already have a mortgage, refinancing (or re-mortgaging) can often increase the amount you can spend on home improvements. If your home loan has a redraw facility and you've made extra repayments, you may also want to consider using that to fund your renovations. |
Construction loan | If your renovation project involves making major changes to your home a construction loan might be a better fit for your needs. A construction loan is slightly different to other loans as the lender normally gives you access to the loan in instalments at different stages of the project. This also means that generally you'll only need to pay interest on the amount that is drawn down rather than the whole loan. |
When comparing competing loans, consider the following features and how well they meet your personal requirements:
Renovating your home can, and often does, add significant value to your property. However, it is worth noting that not all renovations are created equal and not all will add value. Some "improvements" might in fact make your home lose value.
Before you begin renovations, establishing the purpose is very important. For instance, do you:
Finding the right home improvement loan isn't everything when it comes to alleviating some of the expense associated with renovating. There are a number of additional steps that can be taken to keep costs low and maximise your potential value increase.
Homebuyers pay particular attention to a home's bathrooms and to its kitchen. Without spending too much, you could easily transform a seemingly run-down bathroom or kitchen into something more pleasing. When it comes to making cosmetic renovations, it may be best to limit the changes to things that are in plain view.
Plan ahead of time and stick to your plan. When budgeting, take into account the cost of materials as well as labour, and spread your budget suitably across the different spaces that you wish to renovate.
Undertaking renovations the DIY way can help keep costs in check. However, make sure you have access to the right tools as well as the required skills. A bad DIY job will do more harm than good to your property's value, so if you're not confident, don't risk it.
If you take the time to shop around and work on your negotiation techniques, you could potentially save money on supplies as well as labour costs. It's also important to compare your options when it comes to home improvement loans. Use the comparison table above and the tips in this guide to find the best possible deal.
This is particularly important if you're making changes to the house you plan to continue living in because you're the one who will benefit. Energy-efficient additions can be a plus (for your bills and the environment), and by opting to go green, you may also qualify for certain rebates.
It may sound like an oxymoron, but certain renovations could decrease the value of your property. These are some of the renovations to be wary of if your main goal is adding value:
Not everyone's tastes are the same, so decorating your home to your preferences could be off-putting to potential buyers. If you are planning to sell for a profit, it may be best to stick to modern and neutral décor.
As mentioned above, while DIY can be a great way of keeping down costs, it can also have potentially disastrous consequences if you don't know what you're doing.
Swimming pools can be viewed as high maintenance and difficult to remove. If you desperately want a swimming pool added to your home, make sure that you consider whether this is desirable in the area that you live in, or how long you intend to remain at that property, before starting the renovations.
Removing a wall and joining two smaller rooms to make one larger room can be a great way of increasing the space in your home, but more rooms usually mean a higher property value.
It's always wise to ensure that if you want to make alterations to your home, that they are above board. If you require permission from the council to make certain changes, you should get it. If you add rooms to your property that are not council approved, you will not be able to market the property with those rooms.
Before taking out a loan to cover the cost of your repayments, it's important to consider a few things:
To calculate the cost of your repayments on a home improvement loan, you need to consider both the interest rate offered and the loan's fees and charges. Look at how long your loan term is, the repayment frequency, any monthly or annual fees and the rate you will be charged. This will give you an idea of the true cost of the loan and your repayments. You can also use our loan calculator.
Flexibility is another important consideration. Personal loan terms are generally between one and seven years. This is a significant amount of time, so you want to ensure that your renovation finance can be accommodating to any change in your circumstances. Look out for things like being able to make additional repayments or being able to close the loan early penalty-free as well as whether you can opt to change the loan terms.
This is an important question, not only because you could borrow too little money, but because you could also borrow too much. The principal amount you borrow from the lender will have an effect on your interest and could cost you quite a bit of money if you calculate the loan amount incorrectly. And if you borrow too little, it may be difficult to access additional finance to complete your home improvements.
To apply for a home improvement loan, you can compare your options using the table above and click the "Go to site" button if you find a loan you want to apply for. This will take you through to the lender's website where you can fill out an online application form. If you have decided to access additional funds in your mortgage, you will need to speak to your mortgage lender directly.
To take out a personal loan, you will need to be over the age of 18 and a permanent resident of Australia. Depending on the lender, you will also most likely need to have a good to excellent credit rating.
Finally, make sure to compare your options for home improvement loans thoroughly prior to submitting an application.
The last time the cash rate held for extended period of 34 months, banks changed their interest rates seven times - five of which were increases.
Imperfect credit? A non-conforming loan might help you become a home owner.
A concerning number of Australians are misinformed about the JobSeeker changes taking effect after March 31st, according to new research by Finder, Australia’s most visited comparison site. As part of the changes, the fortnightly $150 coronavirus supplement will be axed, yet a surprising number of people think it is increasing, or remaining the same.
Add big value to your house without a major investment with these top tips.
We've picked our favourite property apps for buying, renting and sprucing up your living space.
This flexible variable rate home loan offer from a digital lender is suitable for both home buyers and investors.
Learn how to compare energy providers in your state with our free online tool.
Check out this flexible fixed rate offer from a digital lender. Rates for home buyers and investors.
Compare car loans and discover prices and specs of the Toyota RAV4.
Less than 12 months since borrowers rushed to put their mortgages on hold, Aussies are paying more off their home loan than ever before
I wish to borrow $80000 on a low rate personal loan. Can you recommend some lenders, please?
Hi Darren,
Thanks for reaching out to Finder.
While we are unable to recommend a particular lender or loan offer, you can use our comparison table with a list of low interest rate personal loans. Simply enter the $80,000 under the amount you’d like to borrow followed by your repayment term then press “Calculate”. Our table can help you see a side by side comparison between different lenders based on the interest rate, comparison rate, and your projected monthly repayment.
Once you have chosen a particular lender, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with your loan application or get in touch with their representatives for further assistance.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Cheers,
Liezl
Please I need to apply for a personal loan for a personal matters.
Hi Murphy,
Thanks for your question.
You can use our Loan Finder to find the right personal loan for you. Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you.
I hope this has helped.
Thanks,
Elizabeth