With the end of the financial year rolling around, a lot of Aussies are looking at their own four walls and deciding it is time for a refresh. Maybe the kitchen is stuck in the early 2000s, the bathroom has seen better days, or the family has outgrown the living space. Rather than wrestling with a tough property market, plenty of households are choosing to improve what they already own. The big question is always the same: how do you pay for it? For many, a renovation loan is the answer, but it is far from the only option.
The numbers tell the story. Australians poured around $3.7 billion into residential alterations and additions in the December 2025 quarter alone, according to the Australian Bureau of Statistics, and the renovate-rather-than-relocate trend kept building through the year. With good tradies often booked out months ahead, getting your financing sorted before the new financial year means you can lock in quotes and get on the list.
As an accredited finance broker, we will give you the full picture here, including the options we arrange and the ones that sit with a mortgage broker or lender. Here are six smart ways to finance your reno, and how to pick the right renovation loan or route for the job.
Why So Many Aussies Are Renovating Right Now
The shift toward renovating is being driven by simple economics. Buying a bigger or better home means stamp duty, agent fees, moving costs and the stress of a competitive market. Sprucing up the place you already love often delivers more bang for your buck, and it lets you stay in the neighbourhood, school zone and street you know.
Borrowing costs are part of the calculation too. With the Reserve Bank cash rate at 4.35 per cent as of May 2026, the way you fund a renovation matters more than it did a few years back. The cheapest dollar is the one you do not borrow, and after that, the structure of your finance can make a real difference to the total cost. That is exactly why it pays to understand your renovation loan options before you commit, rather than grabbing the first product a lender waves at you.
How Much Does a Renovation Cost?
Before you settle on a renovation loan, it helps to have a realistic number in mind, because the size of the job drives which renovation loan or financing option makes sense. Costs vary enormously by location, materials and the state of your home, so treat the following as a rough guide only.
A cosmetic refresh such as painting, new flooring or updated fixtures might run from a few thousand dollars up to around $20,000. A standard bathroom renovation commonly lands between $15,000 and $30,000, while a new kitchen often sits in the $20,000 to $45,000 range once cabinetry, benchtops and appliances are counted. Larger projects, such as adding a room or a second storey, climb quickly into six figures. Getting detailed quotes is the only way to know your real number, and that number tells you whether a personal renovation loan comfortably covers the work or whether you are into mortgage-backed territory.
6 Ways to Finance Your Renovation
Not every reno needs the same kind of funding. A $12,000 bathroom refresh and a $200,000 second-storey extension are worlds apart, so here are the main renovation loan and funding routes Australians use, and where each one fits.
1. A Personal Loan for Small and Mid-Sized Jobs
For cosmetic and mid-sized renovations, an unsecured personal loan is one of the cleanest options going. Think new kitchens, bathroom makeovers, flooring, painting, landscaping or built-in storage, typically in the few thousand to fifty thousand dollar range. The big appeal is that you do not have to touch your mortgage or put your home up as security, and the funds are usually available quickly. A home renovation loan through a broker lets you compare lenders without the legwork, and an unsecured personal loan keeps the whole thing simple. This is squarely the kind of renovation loan we arrange every day.
2. A Secured Personal Loan for Bigger Budgets
If your renovation is larger, a secured personal loan may suit better. By offering an asset such as a vehicle as security, you can often access a sharper rate and a higher loan amount than an unsecured option. The trade-off is that the asset is on the line if you cannot keep up repayments, so this renovation loan structure suits borrowers who are confident in their cash flow. As an accredited broker bound by a Best Interest Duty, our job is to weigh these options against your actual circumstances, not just push the easiest deal.
3. Your Savings or Tax Refund
The cheapest renovation loan is no loan at all. If you have savings set aside, or a healthy tax refund landing around EOFY, putting that toward the work avoids interest entirely. Many savvy renovators take a staged, pay-as-you-go approach, tackling one room at a time as cash allows, then topping up with finance only for the bigger items. Our guide on smart ways to use your tax refund is a handy read if a refund is heading your way this year.
4. Your Home Loan: Redraw or Offset
If you have been ahead on your mortgage, you may have a redraw facility or offset balance you can put toward the reno, often at your home loan interest rate, which is usually lower than a personal loan. It can be a cost-effective route for those who have it. Worth being upfront here: this sits within your home loan, so it is a conversation for your lender or a mortgage broker rather than us. We are a finance broker for personal, business, vehicle and leisure loans, not a mortgage broker, so we will always tell you straight when the mortgage path is the one to explore.
5. Refinancing or Accessing Equity
For larger renovations, some homeowners refinance their mortgage or access built-up equity to fund the work. This can unlock a big budget at home loan rates, though it does extend the debt against your property and involves a full mortgage application. Again, this is mortgage territory, so a licensed mortgage broker or your lender is the right port of call. We mention it because being genuinely helpful means pointing you to the best tool for the job, even when it is not one we arrange.
6. A Construction Loan for Major Structural Work
If you are knocking out walls, adding a second storey or doing a major structural overhaul, a construction loan with progressive drawdowns is generally how those big jobs are funded. The lender releases money in stages as the build hits milestones. These are specialised home lending products handled by mortgage lenders and brokers, so they fall outside a personal renovation loan entirely. For everything short of a major structural build, though, the earlier options usually do the trick.
Which Option Is Right for Your Reno?
The simplest way to choose is to match the funding to the size and nature of the job:
- Small or cosmetic jobs (under around $20,000): savings, your tax refund, or an unsecured personal loan.
- Mid-sized renovations ($20,000 to $50,000 or so): a secured or unsecured renovation loan, depending on the rate and your assets.
- Large or structural projects (well into six figures): redraw, equity, refinancing or a construction loan, arranged through a mortgage broker or lender.
For the first two tiers, a personal renovation loan is often the quickest and most flexible path, and it keeps your mortgage untouched. That is where we can genuinely help, comparing options across our lender panel so you land a structure that suits, all subject to lender approval. For the big structural stuff, we will happily point you toward the right mortgage specialist.
What Affects Your Renovation Loan Rate and Approval
If a personal renovation loan is your path, a handful of factors shape the renovation loan rate you are offered and whether you are approved. Knowing them helps you put your best foot forward.
Your credit history is the big one. A solid track record of paying bills and existing loans on time signals lower risk and tends to attract a better rate. Your income and existing commitments matter too, since lenders assess whether the new repayment fits comfortably alongside what you already owe. Whether the renovation loan is secured or unsecured also plays a role, as secured loans usually price lower in exchange for the asset backing them. Finally, the loan amount and term affect both the rate and the total interest you pay, so a longer term lowers the monthly figure but can cost more overall. A broker can read these factors across multiple lenders and match you to a renovation loan that suits, rather than you applying blind and risking a knock-back that dings your credit file.
Smart Tips Before You Borrow for a Renovation
However you fund it, a few habits separate the renovators who come out ahead from the ones who get a nasty surprise.
Get firm, written quotes before you borrow, not rough estimates, so you know the real number. Then build in a contingency of at least 10 to 15 per cent, because renovations almost always turn up something unexpected once the walls are open. Borrowing a touch more up front is far cheaper and less stressful than scrambling for extra finance halfway through.
It also pays to sort the paperwork side. Larger renovations may need council approval or a building permit, and skipping that step can cause headaches when you sell. Where you can, lock in a fixed-price contract with your builder so the cost does not creep, and be honest about what is genuinely a DIY job versus a job for a licensed trade. A botched DIY effort can cost far more to fix than it ever saved.
Check that your tradies are properly licensed for your state, compare the comparison rate rather than just the headline rate when weighing up any renovation loan, and be careful not to over-capitalise. Spending $150,000 on a home in a street where buyers top out below that figure is a quick way to pour money down the drain. If your reno includes energy-efficiency upgrades, a dedicated solar loan may be worth comparing too. The free Moneysmart budget planner is a good tool for stress-testing whether the repayments fit comfortably, and it is always worth a look at our warning about borrowing page before signing anything. You can also read up on what to look for in a personal loan on Moneysmart.
Renovations That Add the Most Value
If part of your goal is to lift what your home is worth, some renovations pull their weight better than others. Kitchens and bathrooms consistently rank as the rooms buyers care about most, so dollars spent there tend to translate into value. Improving street appeal, adding usable living space and modernising tired finishes also tend to pay off.
Energy efficiency is increasingly on buyers’ radars, so solar, better insulation and efficient heating and cooling can add appeal as well as trim running costs. A renovation loan is most worthwhile when it funds value-adding work, so matching a sensibly sized renovation loan to the right improvements is how you avoid spending more than you will ever get back.
A Quick Note for Investment Property Owners
If the property you are renovating is an investment, EOFY timing carries an extra wrinkle. The ATO treats genuine repairs and maintenance differently to capital improvements, and the two are claimed in very different ways, which can affect whether work done before 30 June helps your return this year. This is general information only, so check the ATO guidance and speak to your registered tax agent before you time the work around tax.
Final Thoughts
Renovating before the new financial year is a smart move if you get the financing right. Match the funding to the size of the job, keep a contingency up your sleeve, and do not borrow against your home when a simpler personal loan will do, or borrow on a personal loan when a cheaper mortgage option is right there. The best renovation loan is the one that fits your project and your budget without leaving you stretched.
If your reno sits in the personal loan range, we can help you compare options across our lender panel and find a structure that genuinely suits, so you can get the tradies booked and the work underway. And if it is a bigger structural job, we will point you in the right direction. Either way, plan the money before you swing the hammer.
Disclaimer
The information in this article is general in nature and does not take into account your objectives, financial situation or needs. It is not personal advice, tax advice, legal advice or a recommendation to apply for any product. Tax outcomes depend on your individual circumstances, so consult a registered tax agent or licensed adviser, and seek independent advice where appropriate, before acting on any information.
Get A Loan Finance Pty Ltd is not a lender and is not a mortgage broker. We are an accredited finance broker for personal, business, vehicle and leisure finance, and we work with a panel of lenders and finance providers. Product features, eligibility criteria and availability can change without notice, and all finance is subject to lender approval.
