If you’re considering a renovation but you’re not sure the best way to finance the job, there are a few options to consider no matter how big or small the project. From refinancing, redrawing funds from your current home loan, or even taking out a personal loan, there's an option to suit all renovations sizes and budgets.
Renovations are often a great time to consider refinancing and allow you to apply for extra funds to cover the cost of a renovation, while also getting a better interest rate on your home loan. While there can be a cost to refinance, the benefits of doing so will generally outweigh any incurred fees as a lower interest rate may shorten the term of your loan and reduce your minimum repayments.
If your equity is less than 20% of the property value, we may require you to take out Lenders Mortgage Insurance (LMI) when you switch. This protects Auswide Bank if you're unable to make repayments on your home loan.
Your home's equity is the difference between how much your home is worth (as valued by an appraiser) and the amount you owe on your mortgage. Equity is usually acquired through reducing the home loan balance or the value of your home having increased over time.
Once you know how much equity you have you can apply for a loan increase or alternatively a line of credit with a preapproved borrowing limit.
If you've been paying more than the minimum required mortgage repayments then it's likely you're ahead in your home loan and have built up surplus funds. If your home loan allows it, you could redraw this money to fund the renovation, however it's important to note not all loans have a redraw option.
~Redraw is subject to Auswide Bank's discretion – limits may apply.
+A break cost may apply if the fixed loan is paid out in full or any change made to the loan structure within the fixed term.
* Full details of the Freedom Package are available in the Freedom Package Schedule of Benefits and Freedom Package Terms & Conditions. As per the Freedom Package terms and conditions, some benefits will not be applied to your products unless you advise us that you're a Freedom Package customer. Freedom Package benefits not available on Bridging Loans.
This information is a summary of features & benefits only. This is not an offer to lend - credit assessment criteria, terms and conditions & fees and charge apply - full details on application. Loans are only available to approved applicants offering security in approved property in Australia. Prior to entering into a credit contract with us you should read our Credit Guide.