Renovating your home can be exciting—but it can also be expensive. Whether you’re dreaming of a new kitchen, updating your bathroom, or fixing that leaky roof, the costs can add up quickly. That’s where a home improvement loan can help.
A home improvement loan is a type of personal loan used to fund renovations, repairs, or property upgrades. It can be secured against your home or another asset, or structured as an unsecured loan, depending on your situation. Homeowners commonly use it for projects like kitchen remodels, bathroom upgrades, or structural repairs.
Why Renovate?
Home renovations can increase your property’s value, improve your living space, and make your home more energy-efficient. In New Zealand, popular renovations like kitchen and bathroom upgrades, fresh paint, and landscaping can offer some of the highest returns on investment. Additionally, strategic upgrades such as modern kitchens, bathroom renovations, and adding outdoor living spaces are particularly valuable in the New Zealand property market.
Certain renovations can offer significant returns on investment. For instance, adding a bedroom can potentially double the money you spend, while kitchen and bathroom upgrades can return around $1.50 for every dollar invested.
However, home renovations aren’t cheap. A typical kitchen reno will cost you between $30,000 and $50,000, while a new bathroom could cost between $15,000 and $45,000. So, how do you fund a home renovation project?
Financing Your Renovation with a Home Improvement Loan
There are several ways to finance your home renovation in New Zealand:
- Unsecured Loans: Unsecured loans don’t require collateral. They offer flexibility and can be ideal for smaller projects.
- Secured Loans: These loans use something valuable, like your home, as collateral. They often come with lower interest rates but carry the risk of losing your asset if you can’t repay.
- Mortgage Top-Ups: If you have an existing mortgage, you might be able to borrow more against your property. This can be cost-effective but may extend your loan term.
- Credit Cards: Suitable for very small projects, but be cautious of high-interest rates.
It’s essential to compare different financing options to find the one that best suits your needs and financial situation.
Loansmart Home Improvement Loans
At Loansmart, we specialise in providing smart, fast loans tailored to your needs. Here’s how we can assist with your home renovation:
- Quick Application: Apply online in just 3 minutes.
- Fast Approval: Many loan applications are approved online in 1–2 hours*.
- Same-Day Payment: Once approved, you could receive your funds the same day*.
- Flexible Options: Borrow up to $75,000 unsecured or up to $150,000 secured.
- Competitive Rates: Interest rates starting from 9.95%*.
- Tailored Repayment Plans: Choose a repayment plan that works for you, with terms ranging from 6 to 84 months.
We understand that every renovation project is unique. That’s why we offer personalised advice and work hard to find you a great deal. Our team is dedicated to making the loan process as easy and stress-free as possible. We jump through hoops so you don’t have to!
Want to see what the repayments would be on your dream reno? Use our free online loan calculator!
A Smart Renovation Strategy: Rhys's Story
Here’s an example from one of our clients.
Rhys, a homeowner from Auckland, was eager to start some minor renovations on his house. He initially estimated the costs at around $20,000 and considered applying for a mortgage top-up through his bank. However, the bank’s approval process was expected to take longer than a week, and even a personal loan application would require a few days. Wanting to commence the work promptly, Rhys turned to Loansmart, attracted by our quick approval times.
Understanding that renovation projects often exceed initial budgets, Loansmart’s advisors secured approval for an unsecured loan of up to $75,000 for Rhys. This approach allowed him to revisit his estimates with his tradespeople to ensure sufficient funding. Eventually, Rhys decided to borrow $35,000, providing a comfortable buffer for any unforeseen expenses. This proactive strategy ensured that Rhys could proceed with his renovations confidently, knowing he had the necessary funds to handle any surprises.
This case shows Loansmart’s commitment to offering flexible and timely financial solutions tailored to individual needs. With same-day payouts on lending up to $75,000 unsecured, Loansmart stands out as a fast, low-cost option for homeowners looking to enhance their properties.
Tips for Renovating on a Budget
While renovating can be expensive, there are things you can do to keep a lid on costs.
- Plan Ahead: Determine what renovations are necessary and set a realistic budget.
- Get Multiple Quotes: Compare prices from different contractors to ensure you’re getting the best deal.
- DIY Where Possible: Taking on some tasks yourself can save money, but be honest about your skills to avoid costly mistakes.
- Prioritise: It can be easy to get carried away. Focus on renovations that add the most value to your home.
- Monitor Expenses: Keep track of your spending to stay within budget.
Yes. Unsecured home improvement loans don’t require property as collateral. Approval is based on factors like your credit history and affordability. If your credit profile is weaker, a lender may offer a secured loan option instead
Unsecured home improvement loans usually range up to $75,000. Secured loans can allow borrowing of $150,000 or more, subject to security value and lending criteria.
Yes, for larger renovation costs a home improvement loan is often more suitable than a credit card. Credit cards typically have higher interest rates and are designed for short-term borrowing, while home improvement loans usually offer lower rates and fixed repayments over terms of up to 7 years. This structure can make budgeting easier and help borrowers maintain consistent, on-time repayments.
Ready to Start Your Renovation?
If you’re considering a home renovation and need financial assistance, Loansmart is here to help. With our fast, smart, and caring service, we aim to make the borrowing process straightforward and tailored to your needs.
Apply online today and take the first step towards transforming your home.
