Which Loans are right for Building or Renovating
Most people will buy a home that will suit their needs at the time of buying and they may even account for changing needs in the future. However, sometimes some of the changes to your personal situation may be unplanned for. In many cases you may have to choose between renovating your house to account for your changing needs and simply building a new house that will be suited to you perfectly. Whatever the case is you should be sure that whichever option you choose you take into account your personal comfort and the price.
Why Build or Renovate
When people’s needs change they will look at building a new home or renovating. The advantages of both are:
- Get the home you want. When you build a home you will be able to build the home that you would want. You will be able to decide what size the rooms are and even other smaller things like how many power points will be in a room.
- Adapt your home to suit your need. One of the advantages of renovating a house compared to building a new house is that it is cheaper. Renovating allows you to adapt to your changing needs without the price tag that comes with building.
What Loans are Available
There are a few loans that are available to people who are looking to build or renovate. You should be sure to get the right loan as you will be able to tailor the loan to suit your needs. The loans that are available for builders or renovators through the St.George bank are:
- Construction loan. The construction loans are generally suited to people who are building their own homes, however the construction loans may also be suited to people who are looking to do large scale renovations. The construction loans will generally be paid to the builder in a series of payments and you will only be charged interest on the amount that you use. This feature will save you money while you are building. Furthermore, during the construction phase you will only have to make interest only repayments.
- Renovation loan. The renovation loans are like the construction loans in many ways but will generally be used for smaller projects and usually only for renovating. The renovation loans are similar to the construction loan in that you will only have to pay the interest that accumulates on the loan while you are building. These loans are perfect for people that may be looking to add another room to a house or people who are looking to build a flat out the back of the property.
- Portfolio loan. The portfolio loans are line of credit loans that are very handy for investors and people who are looking to renovate a rental property. The portfolio loans are loans that allow you to separate your different debts into separate sub-accounts on the one loan. Therefore, if you choose to renovate you will simply put the debt into a sub-account on the line of credit and will be able to manage it along with all your other debts.
If you find that you need more room or would simply like to update your home then you will be considering renovating or building a new home. Before you start you should make sure whether building is want you want as renovating can often be cheaper. The St.George Bank offers you a range of loans that will allow you to renovate or build. The loans all have features that will make renovating or building easier.
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- ING Direct Construction Loan
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- An Overview of Building Permits in Australia
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Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
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 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
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 State Custodians Mortgage Company Standard Variable Offset Loan | Awarded Mortgage of the Year 2012 – this multi-award winner features 100% offset and a loyalty 0.25% rate drop after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
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