Financing a home renovation

Renovating your home is a great way to refresh your living space, get more out of a new or existing property, and unlock increased resale value. 

It’s an exciting process, but also one that demands care and attention as well as planning and budgeting. To get the most out of your renovation you will need to create a financing plan that works for you, keeps the project on track, and delivers maximum value. 

We’ll outline several ways to get the most out of your home renovation project.


Decide what work you want to be done – and why


Home renovations come in all shapes and sizes – from a cosmetic refresh to complex construction projects. The first step is to know what you want to achieve and to create a plan that outlines your vision for the work.

There are three common reasons you might be considering a renovation project: 

  • Essential structural or functional renovations. 

  • Making a house feel like a home and fit your vision. 

  • Adding value to your home for future sale. 

First, you should outline your priorities for the project: identify what you want to achieve from the renovation and detail any style preferences. If you’re not sure what you want, consider speaking with an interior designer for cosmetic jobs, or an architect if your project involves building work such as extensions or new builds. 

Depending on your budget and timeframe, make a note of what work is essential and what is a ‘nice-to-have’ that could wait until another time. 


Set a budget and get a range of quotes


Budgeting for your project allows you to realize your vision while getting the best value out of your investment. Without a proper plan and budget in place renovation costs can spiral out of control – especially if the work involves multiple contractors or extensive design and construction work. 

The first step when creating your budget is to work out what you want to spend overall. A portion of your budget should cover any unforeseen expenses you may incur such as delays or unexpected setbacks – this typically amounts to 5-10% of the overall budget.

Finding the right tradespeople to renovate your home is essential. Depending on the scope of your project, you may need to consult interior designers, architects, construction experts, painters and decorators, or even landscape gardeners if you want to spruce up your outdoor areas. 

People often discover tradespeople via word-of-mouth recommendations from friends and family; this can be a great way to find someone who has done a good job in the past. However, you should also consider sourcing quotes from other professionals in your area, so you have a wide range of options to choose from. It’s a good idea to get at least three separate quotes before engaging contractors for your project. Contractor comparison websites  can be a good way to find what options are out there. 

Remember: a quote is an agreed price, while an estimate is subject to change. Always be sure to ask for any estimates, quotes, or subsequent changes, in writing.


Consider your financing options 


Renovating your home is going to require significant capital, so consider the financing options that best suit you. 



Dipping into your personal savings can be a simple way to finance renovations. However, this means your funds  will be tied up in the project for the duration of the work, which may mean pausing other financial goals.   


Personal loans

Taking out a personal loan can provide needed funds quickly and doesn’t require any collateral, but this type of borrowing can incur higher monthly repayments or higher interest rates than other, more tailored, forms of loans. 


Home equity loans

A home equity loan lets you borrow against your home’s value. Their interest rates are usually cheaper than personal loans or spending on your credit card and the interest may be tax deductible (always consult an advisor). However, a home equity loan is secured against the cost of your home. If you default on your debt your property could be at risk. 

When weighing up your options, it’s a good idea to speak to a financial advisor to help you make the best choice for your situation.


Stay on top of the project


Home renovation projects can take a while to complete depending on the scope of the work — it’s possible to incur extra costs or experience delays if you don’t keep on top of the project. 

If your project is going to last a few months or more, you should monitor it carefully to ensure that it’s progressing on schedule and within budget. You may wish to hire a project manager to do this for you as they will have renovation experience and can liaise with contractors on your behalf, freeing you up to focus on other things. If you are overseeing the project yourself, consider using a project management app to plan and manage the process. 

Finally, effective communication is essential to ensuring a successful renovation project. Ensure you have open and consistent lines of communication between yourself, your contractors and your financial advisor or bank. 



Know why you want to renovate your home and what your priorities are before diving in.

Engage the right professionals for the job. Remember to get a range of quotes from contractors before committing.

You can finance the project in a variety of ways and may want to speak with your financial advisor about your options.