How to finance a renovation
There is no single renovation loan. Depending on the size of the job and the equity you hold, the money comes from your redraw, a home loan top-up, a separate equity loan, a refinance, a construction loan drawn in stages, or a personal loan. This guide sets out which route fits which project, the limits each lender publishes, the $250,000 line where Westpac moves a renovation onto a construction loan, and what each route really costs once you account for the term.
- Personal loans cap out between $50,000 (CommBank) and $75,000 (ANZ, Plenti, Great Southern Bank) over 1 to 7 years, unsecured, at rates published from about 7.25% to 22.75%
- Borrowing against the home is limited by usable equity, which Westpac and Emu Money define as 80% of the value minus the loan balance; Westpac allows up to 90% with LMI
- Westpac treats a renovation up to $250,000 as a standard loan increase and anything above it as a construction loan with a fixed price contract and progress draws
- Structural work (moving walls, adding rooms, changing the roofline at ANZ) needs a construction loan whatever the cost; cosmetic work does not
- The term decides the cost: Emu Money publishes $100,000 at 6% over 25 years as $93,290 of interest, against $36,680 on a 7-year personal loan at 9.5%
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees, or other loan amounts might result in a different comparison rate. Comparison rates are based on a secured loan of $30,000 over 5 years for vehicle finance and $50,000 over 5 years for equipment finance, as required under the National Credit Code.
Which renovation finance fits which project?
The banks' own guides agree on the ladder even if they never draw it. Westpac, CommBank, NAB, Suncorp and Bankwest each list the same options: redraw, a loan increase, a separate equity loan, a refinance, a construction loan and a personal loan. The choice turns on two things, the size of the job and whether it is structural. Westpac is the one lender that publishes a number: a renovation of $250,000 or less is a standard or cosmetic renovation funded by a loan increase, and one above $250,000 goes to a construction loan. ANZ and Bankwest draw the structural line instead: moving walls, adding a room or changing the roofline needs a construction loan at any budget.
| Project | Typical cost | First choice | Fallback | Why |
|---|---|---|---|---|
| Paint, flooring, appliances, minor bathroom or kitchen refresh | Under $30,000 | Redraw if you are ahead; otherwise a personal loan | Top-up, if the lender's minimum allows (IMB $10,000, ME $20,000) | Fast, no valuation, and cleared in a few years; Bankwest even lists a credit card for the smallest jobs |
| Full kitchen or bathroom, landscaping, solar and batteries | $30,000 to $75,000 | Top-up or supplementary loan at home loan rates, repaid over a short term | Personal loan up to the caps: $50,000 CommBank, $55,000 NAB, $60,000 ING, $70,000 Westpac, $75,000 ANZ, Plenti, Great Southern Bank | Equity is cheaper if you pay it down fast; the personal loan needs no equity and keeps the debt separate |
| Extension, second storey, several rooms, non-structural but large | $75,000 to $250,000 | Top-up or supplementary loan; refinance if on a fixed rate or switching anyway | Construction loan if the lender requires it for the work type | Above every personal loan cap; Westpac treats up to $250,000 as a standard loan increase |
| Structural renovation, knock-down rebuild, anything over $250,000 | $250,000 and up | Construction loan with a fixed price contract and progress payments | None; lenders require it | Westpac moves you to a construction loan above $250,000; ANZ and Bankwest for structural work at any cost |
What do lenders publish for each route?
Checked against each lender's published renovation, loan increase and construction pages on 20 September 2026; "Not published" means the page does not state it. Personal loan rates are personalised, so the ranges are the published minimum and maximum.
| Lender | Personal loan for renovation | Using equity | Construction loan for renovation |
|---|---|---|---|
| Westpac | $4,000 to $70,000, 1 to 7 years, unsecured; fixed 7.29% to 22.19% (comparison 8.69% to 23.48%), median 16.99%; establishment fee added to the loan; suggests a loan increase or construction loan above $70,000 | Loan increase for renovations up to $250,000: a top-up on variable loans keeping your rate and account, or a supplementary loan with its own rate and term if your loan is fixed; up to 90% of value including the existing loan, LMI above 80%; usable equity is 80% of value minus balance | Required above $250,000: fixed price contract with a progress draw schedule, funds drawn as stages complete, council approvals and evidence of works |
| CommBank | $4,000 to $50,000, 1 to 7 years; fixed 7.25% to 22.25% (comparison 8.30% to 23.12%), variable 7.75% to 22.75%; $250 establishment fee waived on loans applied for and funded 18 August to 9 October 2026; response in 60 seconds | Eligible customers top up or redraw; publishes the lower rate against a personal loan as the reason | For major renovations and knock-down rebuilds: interest-only during construction, 5 to 6 progress stages (slab 15 to 20%, frame 20%, lock-up 20%, fit-out 30%, completion 10%), a progressive drawing fee per request |
| NAB | $5,000 to $55,000; fixed or variable; 7.50% to 22.00% (comparison 8.90% to 23.29%), NAB home loan customers 7.50% to 12.99%; $15 monthly fee, $0 exit fee; projects over $55,000 need other sources; maximum term 7 years | Top up the home loan against equity; the secured-against-home option publishes a $20,000 minimum with no maximum | Construction loan for building or renovating: registered builder, signed fixed price contract, builder insurances before the first draw, progress claim certificates and invoices, final inspection certificate for renovations and extensions |
| ANZ | $5,000 to $75,000, 1 to 7 years, unsecured; fixed or variable; loan approval fee; early repayment charges on fixed loans; notes that structural work needing council approval may exceed a personal loan | Redraw on variable loans, borrow additional funds against the existing loan, or a supplementary loan against equity | Major structural renovation (moving walls, adding a room, changing the roofline): progress payments, interest-only for up to 24 months, build completed within 24 months of first drawdown, shortfalls over $5,000 from savings, LMI usually above 80% LVR |
| Suncorp Bank | Not published on the renovation page | Top-up for smaller non-structural work with the term and loan type unchanged; Add Loan for existing variable customers; a separate Equity Loan that can be a different loan type | For rebuilding, expanding or major renovations, funds released in stages |
| Bankwest | Not published on the guide; lists a credit card for minor updates | Redraw surplus repayments, or increase the home loan limit against equity while keeping one loan and repayment | For structural changes such as knocking down walls and adding rooms |
| St.George | Not published on the page | Top-up or new loan against equity, then self-manage each stage from the variable loan or offset | Progressive drawdown on the Standard Variable Rate Home Loan |
| ING | $5,000 to $60,000; up to $30,000 over 2 to 5 years, above $30,000 over 2 to 7 years; casual and contract workers capped at $30,000; income of $36,000 or more; establishment fee; same-day funds for existing customers | Not published on the personal loan page | Not published |
| Pepper Money | Unsecured $5,000 to $50,000 (18 to 84 months from $8,000); secured $15,000 to $100,000 over 18 to 84 months; no establishment, monthly or early repayment fees; funds next business day | Not published | Not published |
| Plenti | Up to $75,000 per applicant, unsecured; $0 monthly fee; funds in as little as 24 hours from approval; income over $25,000; may counter-offer a lower amount | Not published | Not published |
| Great Southern Bank | $5,000 to $75,000 unsecured fixed; green loan for solar, batteries and resilience upgrades; $0 monthly fee; no establishment fee on applications until 23 February 2027; free redraw; rate in about 60 seconds | Suggests a home loan top-up for equity | Not published |
Using equity to renovate: top-up, supplementary loan or refinance?
Equity is the value of the home minus what you owe, and usable equity is what a lender will actually release. Westpac and Emu Money publish the same formula: 80% of the property's value minus the current balance, so an $800,000 home with a $400,000 loan has $240,000 of usable equity. Westpac allows the total to reach 90% of the value with lenders mortgage insurance, which Emu Money prices at $5,000 to $15,000 depending on the loan. The home equity calculator runs your figures. Three routes release it:
- Top-up (loan increase). The lender raises the limit on your existing loan. Westpac publishes that you keep your loan type, rate and account number, that top-ups only work on variable loans, and that it treats a renovation under $250,000 as a standard application needing your income, expenses and financial position. Emu Money publishes two to four weeks and a $300 to $600 valuation. The top-up guide has the published minimums.
- Supplementary or equity loan. A separate loan secured by the same property, which Westpac publishes as the simplest option if your main loan is fixed, because increasing a fixed loan can incur break costs. Suncorp calls it an Equity Loan and publishes that it can be a different loan type from your existing one, which also keeps the renovation debt visible so you can clear it faster.
- Refinance. Replace the loan with a larger one at a new lender. Emu Money publishes this as the route for fixed-rate borrowers, where breaking early can cost $10,000 or more, or for anyone who can secure a lower rate at the same time; NAB reminds you to count the refinancing fees. The cash-out refinance guide covers the process.
Redraw sits before all three: if you are ahead on repayments, the surplus is your own money, and Bankwest, ANZ and Emu Money all list it first. Emu Money notes some lenders set minimum redraw amounts of $500 to $2,000 and that not every loan has redraw enabled.
What does each route cost?
The rate is the smaller half of the answer; the term is the larger. Emu Money's published example: $100,000 added to a home loan at 6% and repaid over the remaining 25 years costs $93,290 in interest. The same $100,000 on a 7-year personal loan at 9.5% costs $36,680, and a top-up treated as a separate debt and cleared in 10 years costs $33,220, the cheapest of the three. So a top-up wins only if you commit to repaying the renovation portion at personal loan pace, which is the case for a split loan or a supplementary loan with a short term.
| $100,000 renovation | Rate | Term | Monthly repayment | Total interest | Source |
|---|---|---|---|---|---|
| Top-up over the remaining mortgage | 6.0% | 25 years | About $644 | $93,290 | Emu Money |
| Top-up repaid as a separate debt | 6.0% | 10 years | About $1,110 | $33,220 | Emu Money |
| Personal loan | 9.5% | 7 years | About $1,634 | $36,680 | Emu Money |
| Personal loan at a published median rate | 16.99% | 7 years | About $2,043 | About $71,600 | Westpac median rate, our arithmetic |
Add the fixed costs: an establishment fee on a personal loan (CommBank's is $250, waived until 9 October 2026; Pepper Money and Great Southern Bank publish none), a valuation and any top-up fee on a home loan route, break costs if you refinance out of a fixed rate, and for a construction loan the progressive drawing fee CommBank charges per progress payment. The renovation finance calculator puts your amount, rates and terms side by side.
Refinancing for a renovation
Refinancing makes sense in three cases the lenders' guides describe. Your loan is fixed, so a top-up is off the table and the choice is a supplementary loan or a refinance once you have priced the break cost. You are out of contract and can move to a lower rate anyway, so the renovation borrowing rides on a switch you would make regardless. Or your current lender will not lend the amount, because its valuation or its policy on the work type is tighter than another's. In each case the new lender revalues the property, tests your income on the full new balance, and releases the renovation funds at settlement, which for a cosmetic job means you hold the cash and pay the trades yourself. For structural work the new lender will still want a construction loan with progress draws, so refinancing does not avoid the fixed price contract.
When a renovation needs a construction loan
A construction loan is drawn in stages against a fixed price building contract rather than paid out as a lump sum, so you pay interest only on what has been drawn. ANZ publishes it for a major structural renovation, moving walls, adding a room or changing the roofline, with interest-only repayments for up to 24 months and a requirement to finish within 24 months of the first drawdown. CommBank publishes the stage schedule for a full build (slab 15 to 20%, frame 20%, lock-up 20%, fit-out 30%, completion 10%), interest-only during construction, and a progressive drawing fee for each progress payment. NAB lists what it needs from your registered builder: a signed industry-standard fixed price contract, builder's all-risk, home warranty and public liability insurance before the first payment, a progress claim certificate and invoices at each stage, an inspection and valuation of the work, and for renovations and extensions a final inspection certificate. Westpac adds council approvals for work over $250,000 and evidence of the works as they progress. St.George offers a middle path: a top-up or new loan against equity, with you self-managing each stage from the variable loan or offset, which suits a large but non-structural job where you want control of the payments. The construction loans guide walks through the stages; the owner-builder guide covers managing the build yourself.
What the lender will want to see
- Personal loan: identity, income and expenses; no quotes or approvals, and no valuation, because the loan is unsecured. ING wants $36,000 of income, Westpac recommends $25,000, Plenti requires over $25,000.
- Top-up, supplementary loan or refinance: a valuation, current income and expenses, and the loan statements. Westpac treats anything under $250,000 as a standard application; Emu Money publishes two to four weeks.
- Construction loan: everything above plus the fixed price contract, council approvals where needed, the builder's licence and insurances, and a progress claim at each stage.
A broker's value on a renovation is picking the route and the lender before you apply: whether your equity clears the 80% line, whether your current lender's top-up minimum and policy fit, whether refinancing beats a supplementary loan once the break cost is counted, and whether the work type forces a construction loan. Your Finance Guide refers you to one licensed broker partner; we do not lend or approve loans.
Renovation finance guides
Each route in detail, and the calculators.
Renovation loan FAQs
How much can I borrow for a renovation loan?
Which bank is best for a renovation loan?
What is the best way to borrow money for home improvements?
Is a home improvement loan worth it?
Can I remortgage to pay for a renovation?
Is using equity to renovate a good idea?
How much would a $50,000 home equity loan cost per month?
When does a renovation need a construction loan?
How much deposit do I need for a construction loan?
Fund the renovation on the cheapest route
Tell us the project, its budget and your current loan, and we refer you to one licensed broker partner who works out whether a top-up, an equity loan, a refinance, a construction loan or a personal loan costs least over the term you will actually take. Free for borrowers, no obligation.