Finance options to consider for home renovation

Use your equity

Equity is the difference between the bank’s valuation of your house and the amount you owe on the loan. Equity can build up over time because either your home value has risen or you’ve reduced your loan balance.

To get an idea of how much equity you have, use our home equity calculator.

Once you’ve done that, talk to your local NAB banker about how much you could access for your renovation project.

Handy tip

Using equity to pay for your renovation depends on how much you can borrow.

You need to be able to pay any increase in debt, so having $100,000 equity doesn’t necessarily mean you can borrow that much.

Use redraw (if available)

Redrawing from your home loan for renovations may be another option, but it depends on how much you have available to redraw. Not all loans have a redraw option; they’re available on our variable rate home loans but not our fixed rate loans. See how much you can redraw in your internet banking.

Handy tip

If you choose this option the balance on your loan will increase. That means you pay more interest and your repayments are likely to increase.

Refinance your existing home loan

You might consider refinancing your existing home loan to get extra funds for your renovations. A refinance might involve moving your home loan from another lender to us. Alternatively, you may already have a NAB home loan but might need to change it, say from fixed to variable rate.

Handy tip

Refinancing your home loan could also include debt consolidation. You could reduce your costs by putting all your debts, including credit cards and personal loans, into one repayment. Learn more about how debt consolidation works and explore if a personal loan for debt consolidation is right for you.

Apply for a personal loan

If you don’t have enough equity in your home, or you don’t have a redraw facility, then perhaps you could consider a NAB Personal Loan for a home renovation. They’re great to get smaller renovations underway, and you can apply for the loan once you have an estimated project cost. We offer personal loans from $5,000, and the funds are deposited as a lump sum directly into your account.

Handy tip

Interest rates on personal loans are higher than home loans because they’re unsecured credit. The maximum loan term is seven years, so even though the interest rate is higher, the interest charged over the life of the loan will be lower. Also, be aware that your loan repayments are higher because the loan term is shorter.

Consider a building and construction loan

If you've decided to renovate your home, a building and construction loan (BICOE) could be the way to go. A building and construction loan allows you to drawdown on your loan as needed, which means a portion of your loan is released at each stage of construction. This can help you manage your cashflow during a big project and you’ll pay less interest than if you borrowed the entire amount up front.

Handy tip

Keep in mind that as you draw down more of your loan, the amount of interest you pay will start increasing. You'll need to budget for that.

See if you’re eligible for the HomeBuilder grant

The HomeBuilder grant is a $25,000 cash bonus for people that are doing renovations on their existing homes, or building new homes. The Federal Government is providing the grant to boost the construction industry after the effects of COVID-19.

Check if you meet the eligibility criteria by reading more about the Home Builder Grant.

Speak to the home loan expert

Just as you get professional advice about your renovation project, ensure you do the same with your finances. If you’re unsure what type of loan will suit your renovation project, then visit a branch, get one of our mobile bankers to come to you or call us on 13 78 79.