Home Improvement Loan*
What is a Home Improvement Loan?
A Home Improvement Loan is just an addition or increase to a regular home loan for the purpose of carrying out extensions, renovations and/or improvements to your existing or newly purchased dwelling. The uniqueness of a home improvement loan is that you are able to borrow against the on completion value of your dwelling.
How does it work?
Let’s look at an example;
Jock and Mary’s existing home is 30 years old and is in need of some extensive plumbing and electrical repairs. They have decided that while attending to the repairs they would also like to add some value by giving the old home a make over with a complete repaint, addition of an extra room, renovation of the kitchen & bathroom.
The quotation for these repairs and improvements was $46000.
Borrowing with a Regular loan
Value of their home in existing condition |
$300,000 |
Maximum Borrow (90% of value) |
$270,000 |
Current Loan Balance |
$240,000 |
Amount available for Improvements |
$ 30,000 |
This will leave them short $16,000 meaning they will need to either borrow the extra funds via a Personal Loan or cut back on some of their improvements?
Borrowing with a Home Improvement loan
Value of their home in existing condition |
$300,000 |
Value of their home on completion of improvements |
$350,000 |
Maximum Borrow (90% of completed value) |
$315,000 |
Current Loan Balance |
$240,000 |
Amount available for Improvements |
$ 75,000 |
The Home Improvement Loan not only allows Jock and Mary to borrow the full $46,000 required for the repairs & improvements, but also gives them other finance options. They may like to borrow more, up to an extra $29,000 for other worthwhile purposes or set up an equity credit limit which will allow them access to funds at a later date.
The Home Improvement Loan gives them the opportunity to borrow from $240,000 up to $315,000 as compared to a Regular Home Loan which restricts them to $270,000.
Home Improvement Loans are specialist loans and need to be correctly structured. Don’t take chances with a normal mortgage broker or lender, make an appointment to meet with a CommunityBE$T Mobile Lending Strategist who will guide you through the whole process, from application right up until completion of the home improvements.
To make an appointment, simply email us or phone the Finance Centre on (02) 4633 8700. Or submit an application now by completing our 10 min Online Application, |
* Loans subject to application and approval. Terms, conditions and eligibility criteria apply. Fees and charges may be payable.
Extra conditions may apply to the loan, until the repairs and improvements (works) have been completed satisfactorily. On satisfactory completion of the works, the extra conditions are removed as the ‘Home Improvement Loan’ converts to a regular home loan, equity home loan or possible home loan of your choice.