Renovation loans: what a personal loan covers and costs

When does a personal loan make sense for a renovation?

When the job is cosmetic and under the caps, and one of three things is true: you have no usable equity yet, you want the renovation debt separate from the mortgage so it is cleared in years rather than decades, or you want the money in days rather than the weeks a top-up takes.

NAB pitches its loan exactly that way, fast funding for small projects like a bathroom or a pool without touching your equity, and Westpac publishes it as suited to projects between $4,000 and $70,000 such as a new kitchen, painting, gardening or a DIY job.

The cost of that convenience is the rate: NAB publishes that personal loan rates are higher than home loans because they are unsecured, while noting that with a maximum term of seven years the interest charged over the life of the loan can still be lower than the same amount left on the mortgage. Anything structural, or above the caps, moves to the routes in the renovation loans guide.

What do lenders publish on renovation personal loans?

Checked against each lender's published renovation personal loan page on 20 September 2026, with CommBank, Westpac and NAB rechecked on 30 September 2026; "Not published" means the page does not state it. Rates are personalised on credit history, so the range is the published minimum and maximum, and comparison rates are on a $30,000 loan over five years.

Personal loan or equity: what does the difference cost?

The rate gap is large and the term gap is larger, and they pull in opposite directions. Emu Money publishes the comparison on $100,000: added to a home loan at 6% over 25 years it costs $93,290 in interest; on a 7-year personal loan at 9.5% it costs $36,680; and as a top-up you repay in 10 years it costs $33,220.

On the smaller amounts a personal loan is built for, the same pattern holds. A $30,000 kitchen on a 5-year personal loan at CommBank's 16.25% representative rate costs $44,912 in total, the figure CommBank publishes; the same $30,000 on a 6% top-up cleared in 5 years costs about $4,800 in interest, and left on a 25-year mortgage about $28,000. So the personal loan wins on speed and separation, the top-up wins on cost provided you actually repay it fast, and the renovation finance calculator shows the crossover for your own numbers.

What the lender assesses

Because the loan is unsecured, the lender looks at you rather than the project. Income and its stability (ING publishes a $36,000 floor and a $30,000 cap for casual and contract workers; Westpac and Plenti publish $25,000), living expenses and other debts, and your credit history, which sets the rate within the published range.

Westpac's own tip is not to make multiple applications, because each is an enquiry on your credit file; a broker can price you across lenders from one set of documents. Renters can borrow for improvements the landlord permits, and owners of an investment property can renovate it this way, since no equity is taken.

How a broker helps

On a personal loan the useful work is pricing: getting a personalised rate from more than one lender without stacking credit enquiries, comparing fee-free lenders against lower headline rates on the amount you need, and checking whether a top-up with your existing lender would cost less over the term you intend to take.