Dec 2000 Volume 81 Number 12 "serving the protectors"
Home Renovations

In Australia, it is a statistical fact of life that, on average, people move house once every five years. Why? Often it is because the first house we buy is not necessarily the one that meets our needs later in life. For example, what might have been a cute cottage for a couple is inadequate to suit a growing young family. Similarly, a four-bedroom home with a pool or tennis court provides far too much work for an elderly couple.

Upgrading to a new home is an expensive business. In fact, when allowances are made for agents’ fees on the sale of your existing home and the government fees associated with buying a new home, it would not be unreasonable to assume that this exercise would cost about $10,000. Moreover, there is the physical and financial nightmare of relocating family, pets, furnishings and belongings.

Many Australians are coming to the conclusion that, rather than outlay this amount of money for no return, it makes more sense to add on, renovate or modify your existing home.

Spring is the ideal time to commence your home renovations. The weather is more temperate, and the work should be finished in time for a relaxing Christmas.

There are several ways to finance your proposed improvements. Many people would consider adding to their mortgage loan. This gives you the flexibility of not only having a lower monthly repayment over a longer term, but also the benefit of a lower interest rate. Similarly, mortgage secured lines of credit give you control over the payment of accounts, without having to consult your financial institution every time a tradesman requires payment. The only drawback of consolidating your home improvement loan with your mortgage loan is that over the longer term you are repaying more interest.

The alternative to a mortgage loan is a personal loan. While this may be at a slightly higher rate than a mortgage, it is normally repayable in five years or less, with much less interest payable. You can often receive a decision regarding your personal loan application within 24 hours, and the funds are readily available at the time of signing. Funds generally can be directly deposited to your nominated savings account, allowing you ease of access via Visa, cheque book or ATM. This gives you the freedom to look around and obtain goods at the best possible price. In addition, the fees associated with obtaining a personal loan are generally much lower than those associated with a mortgage.

Our lifestyle dictates our choice of home, which over the years may undergo changes or adaptations to meet our needs. There are a wide variety of financial options available to make your dream home a reality - it’s simply a matter of finding the flexible loan to suit your requirements.

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