How to pay for property renovations

How to pay for property renovations

author: Bryony Pearce

By Bryony Pearce

We all want our dream home, but getting the financing part right is key. In this blog, we’ve explored some of the options that may be available to you.

The good old saying “the home is where the heart is” might be overused and incredibly cliché, but that doesn’t make it any less true. It’s where we wake up, wind down, shelter from the rest of the world and go to sleep. It really is our safe haven.

With that said, it’s only natural we want to hibernate in the perfect place, but finding the ideal property isn’t always easy - and that’s where property renovations come in.

From extensions and loft conversions to conservatories and porches, there are a number of property renovations you might be considering, and, in this blog, we’ll talk you through how you can sensibly finance them.

Always do your research

First things first, look around and compare prices, and you could bag yourself a bargain. As a rule of thumb, always get quotes from reputable tradespeople. Remember to look out for any hidden extras before you agree to anything, so that you’re not stung by any additional costs down the line.

By gathering a few quotes, you might be able to negotiate the price of your chosen tradesperson – so it really is worth shopping around as this may save a penny or two.

Finance options

When it comes to funding your property renovations, there are a number of options available, and it’s important to carefully consider which one’s right for you. With the right planning, you could achieve your dream home. But without, you could find yourself in a tricky financial situation and rack up unwanted debts.

Here are a few options you might consider:


Financing your property renovation project with savings is a financially savvy route to go down. By improving your home, you’ll likely be increasing its value which’ll help it sell at a higher price – so you’ll make money on your investment (probably more than you would with current savings rates!).

As it requires a large sum of money upfront, depending on the size and cost of your property renovation, this might not be a realistic option. But if you have the savings, it might be one worth considering. 

Personal loan

The second option we’ll discuss is a personal loan. Personal loans are a form of unsecured borrowing, and you can typically borrow anywhere between £100 and £15,000.

Like searching for the right tradesperson, researching and comparing personal loans can bag you the best deal.

Before you consider taking out a personal loan to finance your property renovation, ask yourself a few important questions, like:

  • Am I in the financial position to take out a loan?
  • Will I be able to afford the repayments?
  • Will I still be able to afford the repayments if my circumstances change?
  • Am I confident I can stick to the monthly payments for the duration of the loan?

If the answer to any is no, then a personal loan may not be the best option for you.

Increase your mortgage

Another alternative could be to let your home finance its own renovations, by increasing your mortgage with what’s known as a further advance. This means asking your current mortgage lender if you can borrow more money from them.

A key consideration here is the interest rate. Don’t be fooled into thinking that the additional borrowing is at the same rate as your mortgage, because that may not necessarily be the case. It’s always worth casting your net further afield to see if you could find a better interest rate than what you’re currently paying.

Homeowner loan

For large property renovation projects, a homeowner loan might make sense. As the name suggests, you must be a homeowner to qualify for this type of lending though.

With a homeowner loan, you can typically borrow between £10,000 and £250,000. Because the lender will have your home as extra security should you default on your payments, you might find that the interest rate attached to your homeowner loan deal is lower than other alternatives – like a personal loan, for example.

But remember, your home is at risk if you fail to stick to your monthly payments, so this option should only be considered if you’re absolutely positive you can afford it.

0% purchase credit card

Last but not least, a 0% purchase credit card could be used to cover the cost of smaller property renovations.

If you’re in a position where you can comfortably repay what you owe within the interest-free period, this could prove to be a hassle-free financing option. But remember, you’ll be charged interest after the interest-free period expires.

Even if you think you can easily repay the credit before the 0% purchase period ends, something unexpected could crop up, so it’s important to make sure the interest rate doesn’t come as a nasty surprise.

One last tip...

Once you’ve hired the best tradesperson, you’ve selected the right financial option, and your property renovations are complete, remember to inform your insurer of what work you’ve had done, so that your home insurance is up-to-date.

We hope you’ve found this blog useful, and happy renovating!

Disclaimer: All information and links are correct at the time of publishing.

author: Bryony Pearce

By Bryony Pearce

How to pay for property renovations How to pay for property renovations