Planning a renovation can be exciting – but funding it is often the trickiest part. Whether you’re updating a kitchen, adding a bedroom, or creating an outdoor living space, there are several ways to access finance for renovations. For Perth homeowners, rising property values mean there’s more opportunity than ever to use equity or refinance strategically.
Here’s the most common ways people access funds to finance their home renovations.
1. Using Home Equity to Fund Renovations
What is home equity?
Equity is the difference between your property’s current market value and your remaining mortgage balance.
Why it’s useful:
- Perth homeowners who bought 2–3 years ago may have seen $100K+ equity growth.
- You can tap this equity to fund renovations at typically lower interest rates than personal loans or credit cards.
How it works:
- Decide on how much to borrow for your renovation project. You may need to be ready with cost breakdowns and quotes, so do this first to know how much you will need.
- Speak with your mortgage broker about accessing your available equity.
- Get your home revalued. We can help with this.
2. Refinancing or Topping Up Your Mortgage
Refinancing: Switch to a new loan to take advantage of lower rates and access extra funds for renovations.
Top-up: Add extra funds to your existing mortgage. This avoids the need for multiple loans.
Benefits:
- Usually lower interest than other financing options.
- Can be structured over the same term as your home loan.
- Potential tax benefits if part of the loan is for investment purposes (speak to an accountant).
Things to consider:
- Costs: application fees, discharge fees, legal costs.
- Ensure repayments remain manageable with your budget.
Read more about refinancing here.
3. Construction Loans for Major Renovations
- Best for large-scale projects like extensions or structural changes.
- Funds are released in stages as work is completed.
- Interest is usually only charged on the amount drawn, not the full loan.
- Provides flexibility and ensures funds are available when needed.
4. Personal Loans & Credit Lines
- Personal loans: Quick access, fixed repayments, suitable for smaller projects.
- Lines of credit / redraw: Flexible borrowing options from your mortgage, ideal for ongoing or phased renovations.
- Trade-offs: Typically higher interest rates than mortgage-based solutions.
5. Government Schemes & Grants (Where Applicable)
- Some Perth homeowners may qualify for grants for sustainable or energy-efficient renovations.
- Examples include rebates for solar panels, insulation, or energy-saving appliances.
- Check WA government websites for eligibility.
6. Tips to Finance Renovations Smartly
- Plan your budget carefully: Include all materials, labour, permits, and contingency (usually 10–15%).
- Use equity wisely: Don’t overextend – ensure your repayments remain manageable.
- Get professional advice: Speak with a mortgage broker to find the most cost-effective option.
- Track ROI: Focus on renovations that increase property value or improve quality of life.
Case Studies: Perth Renovation Financing
Case 1: Kitchen Upgrade
- Home equity available: $120,000
- Project cost: $25,000
- Financing: Top-up mortgage at 5.5%
- Outcome: Adds $40,000 to property value, repayments manageable
Case 2: Bedroom Addition & Deck
- Home equity available: $150,000
- Project cost: $60,000
- Financing: Construction loan drawn in stages
- Outcome: Adds $90,000 in market value, spreads repayments over loan term
Case 3: Sustainable Renovation
- Project cost: $15,000 for solar + insulation
- Financing: Government rebate + minor personal loan
- Outcome: Lower energy bills and increased property appeal
Financing your Perth home renovation doesn’t have to be stressful. Whether you tap into equity, top-up your mortgage, or use a construction loan, the key is planning carefully and choosing the solution that fits your budget and goals.
With the right strategy, your renovation can increase your home’s value, improve your lifestyle, and even save on interest costs.
Thinking about renovating your Perth home? We can help you work out how much equity you have and the best way to finance your project.
👉 Book a free consultation today and start planning your dream renovation.
Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions.
