Six ways to fund a renovation

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6 Renovation Loan Options to Help You Transform Your Home in 2025

Planning a Home Makeover? Let’s Talk Finance First

Whether you’re dreaming of a fresh coat of paint or a full-blown kitchen extension, renovating your home can be exciting—but costly. The good news? There are several loan options available to help you fund your project and boost your property’s value.

At CBM Mortgages, we help Sydney homeowners find the right finance solution for their renovation goals—big or small.

1. Home Equity Loan – Tap Into Your Property’s Value

A home equity loan allows you to borrow against the current value of your home. If you own your property outright or have built up equity, you may be able to borrow up to 80% of its value without paying Lenders Mortgage Insurance (LMI).

Best for: Mid-to-large renovations
Watch out for: Renovation costs exceeding your available equity

2. Construction Loan – Based on Future Value

Unlike a standard equity loan, a construction loan considers your home’s post-renovation value. Funds are released in stages as work progresses, making it ideal for structural upgrades or major transformations.

Best for: Large-scale renovations or rebuilds
Tip: You’ll need council-approved plans and a licensed builder

3. Line of Credit – Flexible and Ongoing Access

A line of credit gives you access to a revolving pool of funds up to a set limit. You only pay interest on what you use, and you can re-borrow as you repay.

Best for: Long-term or staged renovations
Caution: Be disciplined—interest can add up if not managed carefully

4. Refinanced Mortgage – Spread Costs Over Time

If you’re planning a major makeover, refinancing your existing mortgage could be a smart move. You may be able to borrow up to 90% of your home’s value and take advantage of lower home loan rates compared to personal loans or credit cards.

Best for: Full-home renovations or knockdown-rebuilds
Bonus: You may also consolidate other debts at the same time

5. Personal Loan – Quick and Unsecured

For smaller projects, a personal loan can be a fast and simple option. Most lenders offer up to $50,000, with fixed or variable rates and terms of 1–7 years.

Best for: Cosmetic upgrades like painting, flooring, or landscaping
Note: Interest rates are typically higher than secured loans

6. Credit Card – Only for the Little Jobs

If you’re just replacing a few fixtures or doing a DIY refresh, a credit card might do the trick. While interest rates are high, for very small spends, it could be cheaper than paying loan establishment fees.

Best for: Minor purchases under $5,000
Tip: Use a low-rate card and pay it off quickly

Will Your Renovation Add Value?

Before you borrow, ask yourself: Will this renovation increase my home’s value?
Focus on improvements that appeal to a wide range of buyers—like updated kitchens, bathrooms, or outdoor living areas.

Need inspiration? Check out our refinance to renovate blog here

Let’s Find the Right Renovation Loan for You

At CBM Mortgages, we’ll help you:

Understand your borrowing power
Compare renovation loan options
Choose the right structure for your project
Avoid costly delays or overcapitalising

Call us today on 02 8068 0534 or get in touch online to get started.

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Disclaimer:

The information provided in this article is for general guidance only and does not constitute financial or legal advice. It does not consider your personal circumstances. Before making any financial decisions, seek professional advice from a licensed mortgage broker or financial consultant. This content is protected by copyright laws and may not be modified, reproduced, or republished without prior written consent.

Written by Craig McDonald 15/06/2025