At the height of the COVID-19 uncertainty, households put aside an extra $100 billion in savings to weather the economic storm, and the RBA estimates a further $40 billion was pumped into mortgage offset and redraw accounts between March and December last year.
In its latest Statement of Monetary Policy, the RBA said the increase in payments “is likely to reflect a combination of reduced opportunities for spending, mortgage holders saving for precautionary reasons, and some borrowers depositing cash received from early release superannuation and fiscal payments into these accounts.”
What are my other options?
Government stimulus is largely winding down, and not everyone has built up a savings war chest large enough to fund an entire renovation.
So, what are your other options?
According to the Property Seeker survey, Australians also funded their renovation projects through a credit card, tapped into their equity through refinancing, or took out a personal loan.
Your finance choices
When it comes to financing a home renovation your main options are to:
- Use the equity in your home
- Redraw from your current loan
- Use a line of credit
- Refinance your existing loan
- Apply for a personal loan, or
- Consider a building and construction loan.
The option you choose will depend on your particular circumstances, but some lenders will require you to take out a particular type of loan for a renovation. So it’s important to look at the pros and cons of each option, and also to consult Smartline Rockingham upfront about the right finance option for you, so that you can achieve your renovation sooner.