Is now the time to renovate your home?

RateCity Staff

RateCity Staff

With interest rates so low and property price growth continuing at a steady pace now may be a great time to renovate your property findings from a Housing Industry Association survey show.

Whether it is for your own enjoyment or to attract potential buyers, borrowing to complete a renovation has rarely been this cheap with the historic low cash rate keeping borrowers happy around the country.

“Our renovations market survey also indicates that the price of houses in Sydney and Melbourne is persuading homeowners previously considering moving house to instead embark on major renovation projects in their current homes,” explained Shane Garrett, HIA Senior Economist.

“Overall, we anticipate that renovations activity will continue to grow modestly over the next few years and take up some of the slack that will result from weaker levels of new home building.

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With annual home renovations expenditure topping $31 billion, the sector packs quite a punch across the Australian economy,” concluded Garrett.

The latest HIA Renovations Roundup reports that the volume of renovation activity increased by 4.7 per cent in 2015, the strongest growth since 2010.

If you’re considering doing a renovation on your own property, or buying a property that needs some fixing up, you may be wondering what the best way to finance the cost will be.

Here are some options to consider:

Take out a personal loan

A personal loan can help you finance your renovation by giving you access to the money you need at a reasonable interest rate. If you are planning to pay off the debt fairly quickly then this could be a good option for you. Shopping around for a competitive interest rate before settling on a loan will ensure you pay no more interest than necessary.

Use your mortgage

If you have equity built into your property, then redrawing on your mortgage could be a good way to finance a renovation. If your mortgage offers this redraw feature and you’re on a good interest rate, then this could be a cheap way of accessing money for a renovation.  The potential down side to this is that if you don’t pay the balance back in a short time frame you will end up paying a lot more in interest stretched over the loan term.

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