Refinancing for Renovations: How to Fund Home Improvements Smartly
Christian Stevens, Mortgage Broker
Published December 3, 2025, 1:19 P.M
Discover how to use refinancing to pay for renovations. Compare cash-out refi, home equity loans, credit options, costs, interest rates, and smart strategies to maximize your home’s value.
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Key Facts
- Refinancing your mortgage to access equity is one of the most common ways to fund home renovations or extensions in Australia.
- You can increase your loan amount or switch to a new facility using your property’s available equity — without taking out a standalone renovation loan.
- Compared to personal loans, credit cards or pay-later products, refinancing usually offers lower rates and longer, more manageable repayment options.
- Flint Group’s mortgage brokers help you compare lenders, calculate usable equity, and structure your refinance so it supports your renovation budget and long-term financial goals.
Refinancing for Renovations: How to Fund Home Improvements Smartly
Planning to upgrade your kitchen, build an extension, or give your home a fresh new look? Refinancing your mortgage can be one of the most strategic and cost-effective ways to fund home improvements — and is often far cheaper than using credit cards, unsecured personal loans, or short-term finance.
When used correctly, a refinance unlocks equity, lowers borrowing costs, and helps you complete your renovation goals without straining your cash flow. Below, we break down how renovation refinancing works and how Flint helps homeowners structure it safely.
What Is Renovation Refinancing?
Renovation refinancing involves replacing your current home loan with a new one — typically at a higher loan amount — and using the additional funds to pay for renovation works.
The extra borrowing comes from your available equity, which is the difference between your home’s value and your outstanding loan balance. Instead of delaying projects or relying on high-interest borrowing, you convert built-up equity into accessible renovation funds.
This approach is especially effective for homeowners wanting to complete cosmetic upgrades, structural improvements, or value-adding renovations using a low-cost finance strategy.
Why Use a Refinance to Fund Renovations?
- Tap into your home equity: Instead of applying for separate loans, your existing property becomes the financial engine for your renovations.
- Lower interest rates than personal loans or credit cards: Mortgage rates offer some of the lowest borrowing costs available in Australia.
- Spread repayments over time: Rolling renovation expenses into your home loan reduces monthly pressure, which can be especially helpful for larger projects.
- Increase your property value: Well-planned renovations — especially kitchens, bathrooms, outdoor spaces and structural improvements — typically deliver strong ROI and boost long-term equity.
Ideal Scenarios for Renovation Refinancing
- You have available equity: Most lenders allow borrowing up to 80% LVR (sometimes higher with conditions), so having equity in your home is key.
- You’re seeking a better interest rate: If your current rate is no longer competitive, refinancing lets you upgrade your loan AND fund renovations at once.
- You’re planning value-adding improvements: Projects that improve comfort, functionality, or resale value are ideally suited to refinance-funded renovations.
Alternatives to Consider
- Construction loans: Best for major structural changes, extensions, or full rebuilds where funds are released in stages.
- Personal loans: Suitable only for small, surface-level upgrades due to higher interest rates and shorter terms.
- Redraw or offset accounts: If you’ve been paying extra into your loan, accessing redraw may be simpler than refinancing.
Things to Watch Out For
- Property valuation required: Lenders typically order a valuation to confirm how much equity you can access.
- Avoid overcapitalizing: Renovate with long-term value and market conditions in mind — not every project pays for itself.
- Loan term considerations: Lower repayments may mean a longer loan term; Flint helps compare scenarios to avoid unnecessary interest.
- Refinance costs: Include discharge fees, application fees, legal fees and settlement costs when assessing the total benefit.
📞 Ready to Renovate Without Financial Stress?
At Flint Group, our refinance specialists help homeowners:
- Calculate usable equity and borrowing power
- Compare refinance options across major banks and non-bank lenders
- Structure renovation funding to match your project, budget and long-term goals
Chat with Flint today and start renovating with a smarter, more strategic loan behind you.
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