By Jason Given - June 2026 - 7 min read
The average home loan rate is significantly lower than a personal loan rate, a credit card rate, or a buy-now-pay-later product. If you have equity in your property, financing your renovation through your mortgage is almost always the cheapest option.
Adelaide has a large stock of older homes - character homes, 1950s to 1970s builds, and ex-Housing Trust properties - that lend themselves to renovation rather than replacement. Whether it is a $30,000 kitchen and bathroom refresh or a $300,000 extension, there is usually a lending product that fits.
For a simple equity top-up, the lender assesses your application like any refinance - income, expenses, existing debts, and the current property value. The loan amount after the top-up must stay within their LVR limits (usually 80% without LMI).
For construction loans, lenders also want to see a fixed-price building contract, council-approved plans, and a builder's insurance certificate. They will value the property on an "as-if-complete" basis - meaning they assess the property at its expected value after the renovation is done.
This is actually an advantage. If your renovation adds significant value, the lender's valuation of the completed property may support a higher loan amount than the current value alone would allow.
Get quotes before you apply. Lenders want to see what the renovation will cost. A detailed quote from a licensed builder strengthens your application and speeds up the process.
Consider the value add. Not all renovations add dollar-for-dollar value. Kitchens, bathrooms, and extra living space tend to deliver the best returns. A pool or high-end landscaping may not add as much value as it costs.
Budget for overruns. Renovation costs almost always exceed the initial quote. A 10-15% contingency buffer is standard practice. Some lenders allow you to include this in the loan amount.
Lendology's approach: We match the lending product to the renovation. A $40,000 bathroom does not need the same loan structure as a $250,000 extension. Book a free chat and we will recommend the simplest, cheapest way to fund your project.
Yes. If you have sufficient equity, you can increase your existing mortgage to cover the renovation cost. This is typically the cheapest way to fund a renovation because home loan rates are much lower than personal loan or credit card rates. Lendology can calculate how much equity you have available and what the new repayment would look like.
For major renovations - structural work, extensions, knockdown rebuilds - lenders may require a construction loan rather than a standard top-up. Construction loans release funds in stages as each phase of work is completed, and you only pay interest on the amount drawn down. Once the build is complete, the loan converts to a standard home loan.
Not necessarily before applying, but lenders will typically want to see council approval or a building permit before releasing funds for major works. For cosmetic renovations that do not require council approval, most lenders will release funds without permits.