The decline in housing affordability is driving a surge in applications for renovation loans, according to one of our panel lenders ME Bank.
Applications for loans for cosmetic renovations grew 48% and applications for loans for structural renovations jumped 25 per cent between January and June 2017.
Loans for large renovations averaged around $400,000, said ME Bank.
ME Head of Home Loans, Patrick Nolan said, “Many (homeowners) are choosing to stay put to avoid the high house prices, and expenses such as stamp duty.”
Nolan said most ME customers are using equity in their homes to fund their renovations.
With property prices recording extraordinary growth in recent years, particularly in Sydney and Melbourne, owners’ equity in their homes has also increased.
Nolan said borrowers who are ahead with their loan repayments can also dip into that equity.
However, it is crucial not to spend more on your renovation than the value it will add to your property.
Talk to the team at Verge Finance to find out how to access the equity in your home for property additions and alterations.