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<\/strong> The downside is not all loans allow redraw facilities, and you could be hit with redraw fees. More repayments Refinancing<\/strong><\/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<\/strong> 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
\nRedrawing 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
\nmean more interest in the long-term, too.<\/p>\n
\nA 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