Home renovation loan

Your home loan borrowing limit

The amount we can lend you depends on a few things, like your financial situation, credit limits and your usable equity.

• Use our maximum home loan calculator
• While equity is the proportion of your property you currently own, ‘usable equity’ is the amount that you can actually access to fund your reno – calculate your usable equity
• Want to borrow more than your usable equity amount? You may need to pay Lenders Mortgage Insurance (LMI) to insure us against any losses on your loan – estimate your LMI

No matter how much you plan, unexpected costs and delays may be inevitable. So it helps to know the process, regulations and guides before you start.

Generally, there are four stages, and depending on your DIY comfort level, you can bring in experts along the way. Let’s say you’re building a deck – you may be able to build the whole thing yourself. But for an extension, you’ll probably need council approval, designers and tradies.

1. Design. Gather photo ideas for inspiration. You can draw up basic plans yourself, or hire an architect/designer if there are structural changes. A building surveyor can check your property’s boundary.
2. Approvals. Before you do any work, check the regulations with your local council and body corporate, review your building insurance and consider consulting with neighbours.
3. Building. You can DIY (remember ‘measure twice cut once’), or hire builders and check their work along the way. For gas, plumbing and electrical work you'll need licensed tradies.
4. Certifying. A private or council building inspector may need to check the work.

For more tips, visit the Australian Government’s home renovation page.

Equity is the proportion of your current property that you actually own. And if you’re looking to renovate by increasing your current mortgage – or taking out a separate mortgage with different features – you may be able to tap into your equity as security.

Calculate your usable equity

Mortgage repayment calculator

Home loan advantages

• Home loans are secured loans, which generally come with lower interest rates than personal loans or credit cards
• Consolidating all your debt under one loan balance can offer cost savings on ongoing fees.
• Already have an existing home loan with us? There’s no top up fee.
• Borrow as little as $10k, or top up any amount.
• Option to set up a new loan with a different loan term and features, like our construction option or an offset account.
• Increase your home’s value or rental income.
• Choose weekly, fortnightly or monthly repayments.

Home loan considerations

• Your home’s used as security, unlike an unsecured personal loan.
• Mortgage terms can be up to 30 years, so you could end up spreading your renovation cost over decades and paying more interest. Tip: when comparing interest rates with a personal loan amount, plan to repay your home improvements within a similar loan term.

Home makeovers can be costly – but your home improvement loan doesn't have to be. With Westpac there's:

• No home loan increase fee
• No fee to add our construction option to your current or new home loan (external property valuer fees may apply)
• No fee to redraw from your home loan¹.

It depends on several things, like the type of work you’re doing, state laws, local council rules, if the home’s heritage listed, and whether you own the land or it’s under body corporate.

Tip: before work starts, understand what’s common property and seek permission from your local council and body corporate, or you may need to undo your entire renovation.

Cosmetic changes can include:

• Painting the interior
• Laying new carpet
• Installing built-ins

Minor renos can include (check with strata):

• Kitchen renovation
• Changing internal walls
• Installing wooden floors
• Waterproofing the bathroom (may need Owners Corporation AGM approval)
• Installing solar and ceiling insulation

Major renos can include (check with council/Owners Corporation AGM)

• Structural changes to load-bearing walls or posts
• Adding a room
• Adding a large, covered deck
• Adding an outside access ramp
• Granny flat

A variable home loan

Your renovation funds will go into your nominated account.

You can minimise interest by parking funds into your home loan account and drawing down money for your renovation only as you need it. That way you’ll only pay interest on the amount you draw down (just like redrawing).

Or, if you choose our variable loan with offset, you can park your new funds in your offset account, meaning you won’t be paying interest on that amount.

A fixed home loan

Your renovation funds will go into your nominated account.

To minimise interest, you can park up to $30k in your fixed home loan account (over $30k can attract break costs) and only draw down money for your renovation only as you need it.