Renovating Your Home

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Thinking of renovating your home?

Take the time to consider what’s involved and what the best way to finance your renovation is for your situation. CUA can help you to find a solution that’s right for you.

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Step 1

I’m thinking of renovating, where do I start?

Renovating is a great option if you have a location you like and want to make your home suit your family. It’s not to be taken into lightly though. Make sure you thoroughly work out the cost of your renovation to ensure you’re not going to overcapitalise and that the cost of your home won’t be at the expense of your lifestyle.

Know what you want Show more

Prioritise the ‘must haves’ and ‘nice to haves’ and put together a plan. Rank which elements are most important to you in case there comes a time to cut and compromise.

Enlist an architect, an engineer and a builder to come and assess what you want to create vs what you have.

It’s also wise to run your thoughts past a local real estate agent to ensure what you have in mind will appeal to future buyers.

Work with professionals to get quotes and to cost out your build. Make sure you factor in some of the easy-to-forget expenses such as:

  • Any time off work
  • Moving into a rental home
  • Permits, fees and levies
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Important information Important information Show content

Results are based on a single, full time PAYG income with no dependants. Any upfront costs that may be associated with the loan are capitalised in the loan amount. The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. The actual amount you can borrow may vary depending on factors including your verifiable net income, other debts or liabilities you have and the number of dependents you have. Lending is to approved applicants only and all lending is subject to a detailed credit assessment.

Fees and charges are payable. The calculations do not take into account fees, charges or other amounts that may be charged to your loan (such as establishment or monthly service fees or stamp duty). If you are borrowing more than 80% of the value of the property, Lenders Mortgage Insurance may apply. Any of these additional amounts will increase repayments under the loan. .

Repayment is for principal and interest and is indicative only based on the stated information. Changes in interest rates, repayment frequency and loan term will affect the repayment amount.

Assumptions

Expense Details and Default Values
The calculator initially assumes that the borrower has a minimum set of annual expenses of $17,004.
Maximum percentage of income available - currently set at 100% of income

Month
All months are assumed to be equal. In reality, many loans accrue on a daily basis this can lead to varying interest in different months.

Number of Weeks & Fortnights in a Year
One year is assumed to contain exactly 52 weeks or 26 fortnights. Thus the assumption is for a 364 day year.

Rounding
The calculator uses the unrounded payment to derive the amount of interest accrued over the full term of the deposit, however, institutions round repayments to the nearest cent.


Important information Important information Show content

The calculations provided are estimates only and based upon the information entered into the calculator by the user. The calculations do not include upfront or continuing credit fees and charges. The resulting calculations do not constitute a loan application or variation to an existing CUA facility, loan offer or loan approval.

Rates current as at 14 Nov 2019 and subject to change.

Your needs and financial circumstances have not been taken into account. Terms, conditions and Lending critieria apply and are available on application. Other fees and charges may apply. A General Information , Terms & Conditions brochure and Schedule of Fees are available online or from your local CUA branch. You should read both these documents before deciding whether to purchase this product, issued by CUA.

Comparison rate calculated on a $150,000 secured loan over a term of 25 years based on monthly repayments. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Is renovating the right move?
Overcapitalising is when someone spends more money on works to their home than what they’d get back if they sold. For instance, spending $20,000 on a new kitchen that only increases the value of your home by $10,000 means you’ve overcapitalised by $10,000.

Step 2

Can I finance my renovation with my current home loan?

Depending on your current home loan, its flexibility and how much you’ve paid off, you may be able to use it to pay for your renovations.

Redraw from you loan
If you’ve been paying more than your minimum loan repayments and you are ahead in your loan, you might be able to withdraw this extra money. Redrawing from your loan can be very quick, won’t need approvals and in many cases, is free of charge.
Top up your loan
Getting a loan ‘top up’ is basically an extension of the amount you’ve already borrowed, without the need to take out a whole new loan. If your home loan is with CUA, you can take out up to $50,000. Note that it will increase your repayment amount and of course, add extra interest on your loan.
Things to consider
To be on the safe side, ask your trades: Are they licenced? Do they guarantee their work? What type of insurance do they have? Do you need any special insurance? What are their payment terms?
If what you plan is under $50,000 and your home loan is inflexible, you may want to consider taking out a personal loan.

Step 3

Can I take out a new loan for my renovation?

If you require more funds than you can access via redrawing or topping up your home loan, there are a couple of options available to help you make your house to be your perfect home.
Construction loan

A construction loan is an approved amount of money for your renovation as a separate loan , however you only actually access those funds as progress payments instead of one lump sum.

For example, instead of taking out a $100,000 loan and have most of it sitting there for 6 months, you might just receive $40,000 to pay the builder when the first stage of the renovation is complete. You then receive the next sum of money at the next stage, keeping your interest down.

Any CUA Home Loan can be used as a construction loan, so choose the one that suits your needs.

Refinance your home loan

Refinancing means you’d take out a brand new home loan up to 80% LVR of your current home’s market value, pay out your old home loan and use the difference to fund your renovation.

Refinancing your home loan may attract extra fees if you’re paying out a fixed rate home loan, so be sure to make sure the benefit outweighs the cost.

Borrowing questions
Every lender has an interest rate as well as a few fees such as establishment fees or monthly fees. A low interest rate may be countered by high fees. So you can compare ‘apples’ with ‘apples’, comparison rates give you a better idea of the true cost of the loan, factoring in fees to standardise the offer.

Which home loan suits me?

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Will this be your primary place of residence?
Do you want a fixed or variable rate?
Do you require an offset facility?
Do you require a redraw facility?

Your results

Max LVRΔ
Fixed/variable
Interest rate
Comparison rate*

Still not sure?

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Important information Important information Show content

This is only intended as a general guide in relation to issues you may want to consider. It is not intended to be an exhaustive list of all relevant issues and you should take into account your own particular circumstances, and obtain independent expert legal advice where needed, before proceeding.

Rates current as at 14 Nov 2019 and subject to change.

Loans are issued by Credit Union Australia Ltd ABN 44 087 650 959 AFSL and Australian Credit License 238317 to approved applicants only. Lending criteria, terms, conditions, fees and charges apply. Ask us for details.

The "Choose your own CUA home loan" tool is an indication only. Results do not represent pre-qualification for a home loan.

* Comparison rate calculated on a $150,000 secured loan over a term of 25 years based on monthly repayments. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

# On expiration of the fixed period, loan reverts to the relevant Standard Variable Principal & Interest repayment rate.

Δ Maximum Loan to Value Ratio (LVR) is inclusive of Lenders Mortgage Insurance (LMI) where applicable. Maximums based on standard security. Lower LVR limits apply for non-standard security types.

>< Offset is not available on all home loan products. You must maintain a minimum balance of $500 in each offset account to obtain the benefit of the offset from that account. Your offset account will not earn any interest.

>| A $200 minimum withdrawal amount applies for redraws conducted in-branch.

>> A daily transfer will refund any amounts paid in advance in excess of the total advance repayments allowed during the fixed rate period (being $50,000 for Premium Fixed and $5,000 for Fixed) unless sufficient to pay out the loan in full (in which case an Early Payout Fee may apply). Excess funds will be transferred to the nominated deposit account, which must remain open for the fixed rate period.

>|> For Premium Fixed Home Loans, any amount in excess of $50,000 in offset accounts will not be taken into account when calculating interest.

1 Achieve Variable is available to new to CUA home loans only. Minimum loan amount $100,000. Not available for switching or restructuring of existing CUA home loans or to applicants for another CUA home loan fully approved prior to 7/11/2018. Maximum LVR limits apply based on standard security types. Published interest rates and discounts available and applicable to home loans submitted on or after 7/11/2018. Interest rates and discounts may vary by loan purpose (owner occupied and investment) and by repayment type (principal and interest, interest only and construction loans). The discounts specified in your loan contract will not change for the life of the loan provided you do not vary your loan contract. If you vary your loan (for example, changing the loan purpose or repayment type), the rates and discounts may change.

2 Available to new loans of $100,000 or more. Maximum LVR limits apply based on standard security types. New loans only. Offers not available for switching of existing CUA home loans or to applicants for another CUA home loan fully approved prior to 04/07/2018 . Rates vary by repayment type (principal and interest vs interest only) and construction loans.

3 You must maintain a minimum balance of $500 in each offset account to obtain an offset benefit. The maximum in your offset accounts that is able to be offset against your Achieve Variable home loan when calculating interest is $15,000. Offset account balances in excess of $15,000 will not be taken into account when calculating interest on your loan. You will also not receive any interest on the funds in your offset accounts.