Home improvements can be expensive. However, if you plan and budget correctly, you should not be short of money. You may consider paying cash for any new purchases so you do not incur any interest costs. However, you might want to finance the work if you plan on fixing something up. Lenders offer loans for large and small projects and often provide better rates than banks. When securing a loan, lenders will consider how much you wish to borrow, what type of property you own, and whether you intend to repay the loan within a set period. They also check your credit history and income level, so get these things right before applying for a loan.

You might consider using an offset account or withdrawal facility if you plan to take out another loan within the following year. An offset account allows a borrower to obtain a loan from one lender and immediately pay it off to another. To do this, the borrowers must make separate arrangements with each lender. Some banks offer an exceptional service where they can link an offset account to a savings account. When the borrower withdraws funds from their savings account, the amount is to the lender who provided the original loan. However, they also mean that you’ll need to pay fees each month to your lender. These could add up to hundreds of pounds in total. In addition, both types of accounts can only be used once per the loan agreement.

You may also borrow additional capital through your existing home’s equity by increasing the size of your mortgage and then depositing all of these funds into an offset account. So, this allows you to reduce your monthly payments until you pay off your offset balance.

Refinancing your mortgage is similar to replacing your current home mortgage, so make sure you speak to a specialist about the financial implications of doing this. Our Renovation Loans Melbourne team have great experience in assisting with renovations. Therefore you can feel comfortable knowing they can help you find the best solution based on your finances and situation.