WITH VIEW.COM.AU<\/p>\n
There\u2019s no shortage of renovation how-to\u2019s and shows \u2013 The Block and House Rules come to mind \u2013 but as much as we\u2019d all love an all-expenses paid renovation to our beloved home, we\u2019re 99 per cent likely to foot the bill ourselves.<\/p>\n
So, if you\u2019re itching to renovate, what\u2019s the best way of financing it? We break down the options.<\/p>\n
Redraw<\/p>\n
Redrawing from your built-up equity is one tried and true method to finance a renovation. You gain quick access to your money; though you may be redrawing up to the amount you\u2019re ahead on your mortgage payments.<\/p>\n
The downside is not all loans allow redraw facilities, and you could be hit with redraw fees. More repayments mean more interest in the long-term, too.<\/p>\n
Refinancing<\/p>\n
If you\u2019re in the market for a new loan, refinancing may be the way to raise money for your renovation.<\/p>\n
Refinancing with a new lender may give you perks like a lower overall interest rate or better features like an offset account.<\/p>\n
If you have high equity in your home, you could add additional funds or set up a line of credit.<\/p>\n
They will have lower interest rates than a personal loan and if you\u2019re disciplined, you can also opt to pay off the loan as quickly as possible.<\/p>\n
Refinancing may also incur costs such as exit fees, so be wary.<\/p>\n
Top-up mortgage<\/p>\n
A top-up mortgage is similar to a redraw or a refinance, however, grants you more funds than what\u2019s available with either option.<\/p>\n
A lender will give you up to 80 per cent of your home\u2019s value in a topup to spend on renovations (in most cases \u2013 ask your lender or broker).<\/p>\n
If your home\u2019s property value has gone up since you bought the property and you\u2019ve made headway in paying off the equity, a top-up mortgage, with fees included, will be far less compared with a personal loan.<\/p>\n
Since you are borrowing more money, your repayments will go up and your lender will also want an upto- date valuation on the house, too.<\/p>\n
A personal loan<\/p>\n
Taking out a personal loan is a quick and easy way to fund some types of renovation \u2013 adding a deck or a pool is one popular option.<\/p>\n
However, if you make deep structural changes to your property, chances are your bank will disapprove.<\/p>\n
Since loan terms on personal loans are shorter, the overall interest rate may also be lower by comparison, however, you\u2019ll also pay an application fee.<\/p>\n
Credit Card<\/p>\n
There is a big temptation to spend up on the credit card for renos and if you have access to a zero-interest card, it might be a good option, however, some suppliers or contractors may not accept your credit card as payment.<\/p>\n
Making only the minimum payments will also slug you with massive interest (upwards of 17 per cent p.a. on average.)<\/p>\n
There are definitely a lot of restrictions on credit cards, so be wary.<\/p>\n","protected":false},"excerpt":{"rendered":"
WITH VIEW.COM.AU There\u2019s no shortage of renovation how-to\u2019s and shows \u2013 The Block and House Rules come to mind \u2013 but as much as we\u2019d all love an all-expenses paid renovation to our beloved home, we\u2019re 99 per cent likely to foot the bill ourselves. So, if you\u2019re itching to renovate, what\u2019s the best way […]<\/p>\n