3 ways to finance your renovations


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Renovating is one of the most exciting parts of being a homeowner. Whether you’re planning to knock out a few walls, or transform a do-up, renovations are your chance to take a house and turn it into your home. So here are a few tips on how to make good decisions about money along the way.

But all renovations come with a not-so-exciting part; figuring out how to pay for them. So we’re looking into different ways you could finance your renovations.

1. Redraw extra repayments
If you’ve made extra repayments to your home loan, you could potentially borrow back those additional repayments. This can be simpler and quicker than a full application for new lending, but there are a few restrictions so you’re best to check with your lender to see if you’re eligible to redraw any extra repayments.

2. Top-up your home loan
Top-ups use the equity you’ve built up in your home, and enable you to borrow more on the loan you’ve taken to purchase your house. Top-ups are ideal for medium to large sized renovation jobs. The minimum amount you can usually top-up is $5,000. 

3. Credit Cards
If your renovations are on the smaller side – say, retiling the bathroom, or adding in a sliding door, a low interest credit cardcould be just the ticket. At around 12-13%p.a. the interest rates are a lot lower than the 20% you can expect with a normal credit card, plus you can make use of interest free days. If you do opt for a credit card, just remember to keep track of how your spending’s going and make sure you pay more than the minimum repayment to minimise your interest costs.

Truth is, every renovation is different, and there’s really no “right” way to go about financing a project. So if you’re thinking of ditching the weekend DIY and getting into some serious renos, feel free to pop in and have a chat with the staff at your local BNZ, and figure out a plan that can help you be good with money.

BNZ Lending criteria, terms and fees may apply. Early repayment charges may apply.

This article is intended as a general discussion only, and is based on selective information which may not be suitable for your purposes. BNZ strongly recommends the recipients take independent legal, investment and financial advice prior to making any investment decisions.