With travel plans currently on hold, many of us have put those savings into sprucing up our own homes.
In fact, spending on renos spiked shortly after lockdowns began and has been going strong ever since. Our recent 'Home Is Everything' competition certainly supported this, with hundreds of entries pouring in to show how our homes have become our offices, gyms, playgrounds and schools.
With extra money in the bank and extra time at home, now could be the ideal time to make some changes. But whether you're overhauling your entire property, adding a home office or just tidying up, you'll need to create a budget and sort your finances before you get started.
When renovating, it's important to think about your 'why'. Are you renovating to create a home you want to live in, or are you getting your property ready for sale?
Keep your reason for renovating at the back of your mind throughout the entire process, especially while budgeting.
Before you hammer a single nail, you've got some serious planning to do to create a detailed budget that will allow you to complete your reno without spending more than you originally intended. Get started in five simple steps:
If you're planning to make substantial changes to your home, it may be worth considering what your options are when it comes to financing your plans:
Paying cash is a simple, straightforward way to cover the cost of your renovations - if you have it available. With that said, if you're using existing savings, you'll need to be extra careful not to exceed your budget while also building in a buffer in case of any over-runs.
The Government's Home Builder programme provides eligible owner-occupiers with a grant of $25,000 to substantially renovate their homes. To qualify, you'll need to have a building contract for renovations valued at least $150,000, as well as meeting other eligibility criteria. Apply and check if you're eligible through your State or Territory's website. You can also read more about this programme in the Treasury Fact Sheet.
A loan top-up may allow you to increase your home loan and use those funds for renovations if you've got excess equity and can afford to make repayments home loan repayment calculator. The benefit of a loan top-up is the ability to access low home loan interest rates and a long loan term.
Refinancing your home loan may be another smart way to fund your renovations. This involves paying off your existing loan with a new loan and increasing your borrowing to fund renovations.
A personal loan could be a good idea for smaller amount renovations.. With a Qudos personal loan you'll get access to low variable interest rates, flexible repayment options, $0 accounting fees and a loan period of one to seven years (for amounts between $5,000 and $25,000).
One of the most important steps of any renovation is budgeting thoroughly and getting your finances ready to go. Before you pick up the tools, plan out your budget, arrange your finance and remember that your team at Qudos Bank is always available if you need a hand.
Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.
The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.
Loans are subject to approval. Normal lending criteria, terms and conditions and fees and charges apply. Mortgage insurance is required for home loans over 80% and is subject to approval.
You should read and consider the relevant terms and conditions and our Financial Services Guide available on our website qudosbank.com.au, before deciding whether to obtain any of our financial products or services.