Renovate or relocate?

If you’ve been in your home for a while, you might be ready for a change. But do you renovate? Or do you sell up and move somewhere else? Find out about your financial options and the things you should consider.


The costs

If you live in an older home, be aware of hidden factors like the wiring or the condition of plaster and stumps. A simple project can soon become bigger (and more costly) than you first thought.

Ask a builder to take look at your home and chat about any changes – they might have some great ideas, too. They’ll be able to give you an estimate for the bigger jobs like moving walls and retiling.

The value

A renovation could increase the value of your home, making it an investment as well as an upgrade. Once you’ve spoken to a builder, ask a real estate agent to estimate how much value the changes will add to your home.

If the value is greater than the cost of the changes, it might be time to start work. If not, moving to a new house could be the smarter option.

It also pays to think ahead to when you might sell your renovated property. Will it meet the needs of a typical buyer in the area? For example, if there are no schools nearby but you want to create a family home, will it be easy to find a buyer with a family when you want to sell?

Paying for a renovation

There's a few ways you could fund your home renovations.

You could apply to increase your home loan. It’s similar to applying for a home loan, so talking to a Home Lending Specialist is a good place to start. They’ll look at your income and expenses, and revalue the property based on the current market so they can let you know your options.

If you’re making structural changes, you could apply for a construction loan. This means that your property can be valued to include your planned changes, potentially letting you borrow more funds. Keep in mind that for structural renovations, you need to let your Home Lending Specialist know what you’re planning no matter how you’re paying for it.

If you’re making non-structural changes, you could still apply for a construction loan or you could use the equity in your home.

If you’ve made extra repayments to your home loan over time, you’ll have built up a surplus balance. If your loan type allows, you could redraw the surplus funds to help pay for the renovations.

Moving to a new home

If you choose to move somewhere new, there are some financial things you’ll have to think about.

You could use the equity in your current home to buy your new house. If it doesn’t cover the deposit for your new place, you’ll need to chip in some savings too.

Think about expenses like an agent's commission, legal fees and stamp duty, loan fees and removalist fees when budgeting your move, so you’re not caught out late in the game.

Whether you choose to use your available home equity or your savings to cover the deposit for your next home loan, take the time to research the home loan types that suit you.

We’re here to help

Our Home Lending Specialists can help you find the best loan option, whether you renovate or move.

About this article

We take care of all the BS (bank stuff) so you can access the knowledge you need to make informed decisions. When we write a guide or article, we take steps to make sure the information is relevant, accurate and most of all, helpful.

Ask an expert

Get in touch with a Home Lending Specialist, and they’ll respond within one business day. You can talk on the phone, meet at a branch, or have a Mobile Lending Manager come to you.

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.