Renovation Home Loans Sydney
In Need of a Renovation Loan in Sydney?
Renovating offers Sydney property owners a cost-effective alternative to upgrading in a high-value market. Modest cosmetic projects can leverage built-up equity through a simple loan top-up, while major structural builds utilize construction loans with progressive drawdowns. Our brokers evaluate your available equity and structure the right renovation loan at zero cost to you. (Government and Lender fees and charges may apply).
Types of Renovation Loans we can help with
How much can I borrow for a Renovation Loan?
Your borrowing capacity hinges on usable equity, how much your property might rise post renovation and serviceability. Sydney lenders typically allow borrowing up to 80% of the property value. For minor cosmetic updates, equity is calculated on your current property value. For major structural projects, lenders can assess equity using projected post-renovation “as-complete” valuations, provided your income and living expenses satisfy serviceability assessments.
What is Our Renovation Loan Process?
Step 1: Initial Assessment & Goal Setting
We’ll learn about your goals and discuss the likely value created by your property renovation. To understand your borrowing power, we’ll calculate the current equity in your property and assess your current financial position.
Step 2: Evaluating Your Borrowing Capacity & Loan Structure
We’ll run the numbers to calculate your borrowing capacity under a range of renovation loan types, so you can easily compare repayments, total costs and loan features. Importantly, we’ll stress-test the numbers to account for potential renovation delays or price hikes in supply.
Step 3: Comparing the Market for Competitive Renovation Loan Options
We’ll review loan options for renovation from a range of bank and non-bank lenders, and present recommendations that will best suit your financial circumstances and project timelines. Most importantly, any guidance given will have your best interests at the core of our recommendation. We are bound by the Best Interests Duty (BID) under the NCCP Act.
Step 4: Managing Your Loan During & After Renovation
Our service doesn’t end at settlement. We’ll remain on hand to provide ongoing guidance and manage your loan structure during the renovation process, and to review loan options once the works are completed. If renovations have added substantially to your property value, we’ll check if you’re eligible for a better deal on your ongoing loan.
Meet Our Expert Team
Renovating is exciting until the funding gets complicated. Our Sydney team helps you work out how much you can access and structures the loan so the project stays on track from start to finish.
Sydney Loan Calculators
Costing a renovation is simpler with the numbers to hand. Our free calculators help you estimate repayments and work out your borrowing power so the project stays on budget.
Frequently Asked Questions
Home loans for renovations is a specialised lending structure that allows property owners to borrow money against their property to fund cosmetic upgrades or structural building improvements. For modest renovations, homeowners will often access their available equity to top up or refinance their existing home loan. For larger-scale works, a construction loan may be used, where the lender releases funds in stages as the work progresses.
Yes, you can add renovation costs to your existing mortgage by topping up your loan or refinancing, provided you have sufficient built-up equity and can comfortably afford the higher minimum loan repayment. Lenders will typically allow you to borrow up to 80% of the property value today for small projects or up to 80% of the improved property value, if it can be proven the works will add value such as extra bedrooms or bathrooms.
Council approval is mandatory before formal loan approval if your renovation involves structural alterations, extensions, or changes to the building’s footprint.” In Sydney, minor or cosmetic works generally do not require a Development Application (DA), or they may qualify under a fast-tracked Complying Development Certificate (CDC). Your lender will likely require evidence that the necessary approvals are in place before approving your renovation loan.
For larger projects and construction loans, funds will be released in agreed stages called progressive drawdowns or progress payments, as the project progresses. For modest renovations, your lender will typically pay you a lump sum upfront, or establish a line of credit which you can draw down as needed.
Whether you live in a property during renovation is a personal choice – you may wish to stay through minor renovations, but move out while major structural works are going on. You should consider possible accommodation costs when budgeting for your renovation, and your lender may want to understand your plans for alternative accommodation for major projects. Otherwise, your choice won’t generally have a bearing on your loan.
Nearly all home or investment property improvements over $10,000.00 are eligible for mortgage financing, whether cosmetic or major. However, specific funding options will change depending upon the size and nature of the renovation project – very small projects, for example, less than $10,000.00, may be covered by a personal loan, medium sized projects, often under $50,000.00 can potentially be done as an equity release, whereas major projects may require a structured construction loan.
Renovations will not directly increase your borrowing power, which is based on your income, expenses, debt and credit history. However, if they add value to your property, this will increase the available equity in the property. You may then be able to access a loan top-up or refinance against the new property value.
Yes, you can refinance your mortgage after renovations are complete to order a new valuation and unlock the newly created equity. If your renovations result in an increase to the market value of your property, this will increase the equity you now have available. You may be able to top up or refinance your existing loan to take out additional funds, using the new equity as security. It is also a good time to check whether the additional property value entitles you to a change in interest rate or additional loan features – your mortgage broker can help with this.