Improve, don't move: exploring finance for a renovation

Plenty of people on the Fleurieu love where they live — the street, the neighbours, the walk to the beach — but their home doesn't quite fit anymore. Maybe the family has grown, you're working from home, or the kitchen is from another era.

Renovating can be a great alternative to moving. But before you call the builder, it's worth understanding how you might pay for it.

Start with a clear plan and budget

Before looking at finance, get a realistic idea of:

What you want to do and why
Rough costs, ideally with quotes
A contingency buffer — renovations often uncover surprises
Approvals you might need from council
Whether the work adds value, or is mainly for lifestyle (both are valid — just be clear which)

Common ways to finance a renovation

The right option depends on the size of the project, your equity, your income and your lender. Some common approaches include:

Using savings or an offset/redraw balance

If you've built up savings or extra repayments, this may cover smaller projects. Check whether redraw is available on your loan and how it works.

A loan top-up (increasing your home loan)

If you have enough equity, you may be able to increase your existing loan. Your lender will assess your current income and expenses, and may order a valuation.

Refinancing

Sometimes it makes sense to refinance to a different lender while releasing equity, particularly if your current loan no longer suits you. There can be costs to switch, so we'd compare carefully.

A construction loan

For larger structural renovations, lenders may offer a construction-style loan, where funds are released in stages as work is completed. These usually require a building contract, plans and approvals.

Things to keep in mind

Borrowing more means more debt and higher repayments. Make sure the new repayments fit your budget comfortably.
Valuations matter. For some loan types, lenders may consider the expected value after the work is done. Policies differ.
Use licensed builders and fixed-price contracts where possible — lenders often require them for larger works.
Personal loans and credit cards usually have higher interest rates than home loans, so think carefully before using them for big projects.

Talk to someone early

The best time to talk about finance is before you sign a building contract. That way you'll know your budget, what lenders need, and how the process works — so the only surprises are good ones.