Renovations

Love your home, but it could work better for your family? Bank’s don’t shy away from renovation funding at all, however, there are a few extra steps compared to just buying an existing home.

1. Lay out the scope of what you’re planning to do. Good planning and management can not only make the process less stressful but also keep the project on track. Banks like to know in advance what the scope is and approve the loan on that basis. Although they can assist from time to time in the event of an overrun, take the position not to rely on that. Prior to the loan advancing the bank would usually want a copy of all the quotes – however we can work towards a top-up on the loan prior to seeing this.
2. Identify your equity position in your home. We can help you with this, however as a simple example generally you can borrow back to 80% of the value of your home.
   
   Available Equity = (Current Value * Maximum Lendable %) – Current debt
   
   Let’s say your home is worth $1,000,000 and you have a loan of $700,000. Your ‘available equity position is ($1,000,000*80%) – $700,000 = $100,000.
   
   You still need to meet other criteria (income stress-testing), however equity is always the starting point. You can use this to easily borrow for non-structural renovations, or if it’s a bigger scope we can commission a valuation based on those works being completed.
3. Low Interest Renovations. Banks have special offerings at low to no interest to do renovations which improve the efficiency of your home, such as insulation, heat-pumps, solar panels etc. We can help you see if your project could have some of it funded on these cheaper terms.
4. Bigger projects. In the event your project exceeds the available equity you have or needs consent for the work you do, this may be managed more like a construction loan than a renovation loan. See our construction section for more on this.
5. Insurance. Especially for larger projects where consents are involved having a ‘contract works’ insurance policy is essential. This is something that would need to be arranged prior to any substansive work being carried out on your home.

Bonus:

1. Some major works no longer require consent. In August 2020, building rules were eased for some works such as dwellings <30m2, awnings, carports and several other exemptions. 
2. Changing the layout may add value. Adding non-load bearing walls to create another space can in some cases add value to the property.