holistic home loans
Holistic Home Loans news first home buyer products & services calculators & tools about hhl contact us


renovation and construction
Financing your renovation + construction

Whether your renovation involves an update to the interior of your home, major structural changes, or a complete rebuild, it pays to plan the financial side of your project carefully and ensure that your plans proceed smoothly.

The type of work you are planning will determine the type of loan applied for and also the lender requirements.

Structural Improvements - Construction

Structural improvements, whether they be an extension, a complete rebuild or new dwelling will generally require a lodged development application, architectural plans, local council approval, and home owners warranty insurance. A lender will also have a registered Valuer or Quantity Surveyor check the approved plans and builders costing to estimate the “on completion” value of your home following the renovation.

Structural improvements or Construction projects are treated differently to other loan purposes. A “construction loan” is usually established as a separate facility (i.e., separate from your existing mortgage) that is progressively drawn-down to the builder as each stage of the construction is completed (i.e., the lender will pay the builders invoice directly to your builder). Once works are fully completed, and the lender has completed its final inspection (where required), the final payment to the builder is made and the loan becomes fully-drawn.

Non-Structural Improvements - Renovation

Non-Structural improvements or Renovation to a home interior and exterior are viewed with a greater degree of flexibility by a lender. Such non-structural improvements normally don’t require council development approval nor architects plans to be provided.

Such works may include interior/exterior painting, updating the bathroom, installing a new kitchen, sanding floorboards, laying new carpet etc. As these types of jobs will normally be completed by various trades and generally smaller than most Construction Loans, the full loan funds are made available to you upfront to be disbursed at your direction (via provided cheque book or EFT)

Interest Rates – Selecting the right lender

Not all lenders will consider construction lending. Of those that do offer “construction loans” some see the need to charge the borrower a higher interest rate during the construction period.

However, different lenders approach construction loans differently, and some of the better loan products available do not charge a premium to construction borrowers. To discuss what loan might suit your requirements, please contact an Holistic Home Loans advisor to discuss.

Holistic Home Loans
18/12 Tyron Rd
Lindfield NSW 2070
Telephone: 1300 452 384