Property prices across Queensland aren’t what they used to be, and neither are the homes. In suburbs like Brisbane, the Gold Coast, and Moreton Bay, many homeowners are realising it’s often smarter to upgrade what they have than try to afford something new.
Renovation loans help make that possible. Whether it’s modernising a tired kitchen or fixing ageing bathrooms, these loans give homeowners the means to upgrade without a hefty lump sum.
They’re designed to turn old spaces into something more functional and valuable, perfect for growing families who’d rather not move. In a market where limited supply meets rising demand, renovating is becoming the practical way forward.
This guide will explore everything you need to know about renovation loans, and how they can help you improve - not relocate.
Our Queensland mortgage brokers at Zest Mortgage Solutions make financing your renovation simple, whether it’s a bathroom update or major structural work. We’ll match you with the right lender, compare rates, and handle the paperwork start to finish. Call us at (07) 3461 6499 or visit www.zestmortgagesolutions.com.au for a free consultation.
What Is a Renovation Loan?
In simple terms, a renovation loan is money borrowed to improve or upgrade a property you already own. It’s used when you want to fix, extend, or modernise your home but don’t have the full cost sitting in your savings account.
These loans are common across Australia and are especially popular in Queensland, where many older homes are packed with potential but need serious updates.
What Do Renovation Loans Cover?
Renovation loans can cover a wide range of projects, including:
- Kitchen upgrades or full remodels
- Bathroom renovations
- Structural changes like removing walls or building extensions
- Roof replacements or raising a home
- Cosmetic work like painting, tiling, flooring, and landscaping
- Outdoor improvements such as decks or pergolas
- Energy-efficient additions like solar panels or insulation
Basically, if it adds value to the home or improves liveability, it’s usually fair game.
How Is It Different from a Standard Home Loan?
A regular home loan helps you buy a property. A renovation loan helps you improve one.
The key differences include:
- Purpose: Standard loans fund purchases; renovation loans fund upgrades.
- Disbursement: Renovation loans may be released in stages (especially for major projects), unlike a standard home loan, which is paid in full at settlement.
- Documentation: Lenders often require building quotes, renovation plans, and sometimes council approvals; this isn’t needed with a normal home loan.
- Redraw facilities can fund renovations, too, but only up to the amount you've already repaid ahead of schedule. So, they’re limited.
Where Are They Commonly Used in QLD?
Across Queensland, renovation loans are helping homeowners transform tired houses into modern, functional homes, especially in:
- South Brisbane: Think post-purchase renos for ageing units near the Cross River Rail and Brisbane Metro
- Moreton Bay & Deception Bay: Ideal for first-home buyers upgrading dated properties to meet growing family needs
- Spring Hill & West End: High-demand areas where even minor upgrades can significantly boost resale value
- Gold Coast & Sunshine Coast: Coastal homes often benefit from lifestyle-driven upgrades, decks, bathrooms, open living spaces
With increasing pressure from interstate migration, limited housing supply, and rising property values, more Queenslanders are choosing to renovate rather than relocate. And with the right renovation loan, it becomes a lot more doable.
Popular Types of Renovation Loans in Australia
Not all renovation loans are created equal. The type of loan you choose should match your renovation project, budget, and how much flexibility you need.
Here’s a breakdown of the most common renovation loan options used by homeowners across Queensland.
Home Loan Top-Ups (With Your Existing Lender)
A home loan top-up lets you borrow additional funds on top of your current home loan. It’s a convenient option if you’ve built sufficient equity and want to tap into it for minor or moderate renovations.
This option is ideal for homeowners who want to avoid refinancing or switching lenders. It typically lets you borrow more under the same fixed or variable rate structure as your existing home loan.
Construction Loans (For Major Structural Renovations)
If you’re planning major renovations, like adding an extra bathroom, raising the house, or reconfiguring the structure, then a construction loan might be the better fit. Funds are released in progress payments as different stages of the build are completed.
This loan type often requires detailed renovation plans, a fixed-price building contract, and quotes from a licensed builder. It’s commonly used in suburbs undergoing rapid transformation, like parts of East Brisbane and Upper Mount Gravatt.
Personal Loans for Renovations
A personal loan is an unsecured loan, which means you don’t need to use your property as collateral. These are great for minor renovations, such as painting, installing new benchtops, or updating lighting and tiles.
They come with shorter loan terms and higher monthly repayments, but can be approved faster than other financing options. Just be sure your cash flow can handle the tighter schedule.
Line of Credit / HELOC Options
This flexible financing option lets you draw funds as needed, making it ideal for staged projects or renovations that evolve over time. You only pay interest on what you use, which can help manage renovations cost more efficiently.
It’s handy if you want to pay for labour costs, additional materials, or unexpected costs without dipping into your savings stash or relying on credit cards. This works best when paired with a clear repayment schedule.
How to Qualify for a Renovation Loan in QLD
Before any money hits your account, lenders want to know your project is solid and you can repay the loan comfortably. The application process can feel like a maze, but breaking it into simple steps makes it easier to handle.
Here’s what you’ll typically need to qualify for a renovation loan in Queensland:
Step 1: Credit Score & Income Checks
Your credit history, income, job type, and spending habits all get reviewed. Most lenders prefer a credit score of 650 or above and steady income backed by payslips or tax returns.
Tip: If your credit file has a few dents, a loan expert or broker can guide you to lenders with flexible credit approval rules.
Step 2: Building Approvals & Council Permissions
For any major project, especially in areas like Brisbane City Council or Moreton Bay, you’ll likely need a Development Application (DA) or council permit. Renovations affecting structure, zoning, or setbacks usually require sign-off before funding is approved.
Tip: Always check with your local council before starting, you’ll save time, money, and stress later in the renovation journey.
Step 3: Property Valuations & Builder Quotes
Lenders will request a formal valuation of your current property to assess your borrowing capacity. You’ll also need detailed quotes from a licensed builder outlining the scope, renovation costs, and materials.
Tip: Choose a builder experienced with building contracts and progress payments. They know what lenders look for.
Step 4: Lender Documentation & Paperwork
Each credit provider has their own checklist, but you’ll generally need ID, payslips, bank statements, and detailed renovation plans. Some banks also require insurance proof and signed fixed-price contracts for large jobs.
Tip: A mortgage broker, such as the team at Zest Mortgage Solutions, can help organise your documents, liaise with lenders, and explain unfamiliar terms like lenders mortgage insurance or loan term conditions.
Renovating Soon? Let’s Talk Loan Strategy.
Don’t guess your way through the renovation loan process. Our expert Queensland mortgage brokers work with top lenders daily and can tailor your loan to suit your budget, goals, and timeline. Whether it’s a home loan top-up or construction financing, we’re here to simplify it. Call now: (07) 3461 6499 or head to www.zestmortgagesolutions.com.au.
Frequently Asked Questions (FAQs)
Which bank is best for a home renovation loan?
It depends on your needs, credit profile, and the type of renovation. Banks like Suncorp, NAB, and ANZ offer solid options, but speaking with a Queensland mortgage broker can help you compare rates and features across lenders.
What is the maximum limit for repair and renovation under a home loan?
There’s no fixed cap; it depends on your borrowing capacity, usable equity, and lender policy. Some borrowers access amounts over $200,000 for larger projects, especially through construction loans.
Is it a good idea to use equity for renovations?
Yes, using home equity can be a cost-effective way to fund improvements, especially if you’re staying long-term or aiming to increase property value. Just be sure your loan repayments fit your cash flow.
What is the best loan for home improvements?
For major renovations, a construction loan or home loan top-up is ideal. For minor updates, a personal loan or line of credit might be more suitable.
What is the best way to pay for renovations?
The best way is one that aligns with your budget, project size, and future goals. It could be extra funds from your mortgage, a progress-payment loan, or tapping into equity. Always compare your loan options first.
What is the difference between a renovation loan and a personal loan?
A renovation loan is usually tied to your mortgage and offers lower rates, especially for large works. A personal loan is faster to set up but may come with higher rates and shorter terms.
Wrapping Up
Renovating in 2025 doesn’t have to feel like guesswork. With the right renovation loan and a clear plan, you can update your space and boost your home’s value.
It means you get to stay right where you love, whether that’s in Brisbane, the Gold Coast, or anywhere in regional Queensland.
At Zest Mortgage Solutions, we offer free consultations to help you explore your loan options, figure out what suits your project, and avoid any surprises along the way. We’ve got local offices in Springfield and Ipswich, proudly serving the wider Queensland community.
Call us today at (07) 3461 6499 or visit www.zestmortgagesolutions.com.au to book your free chat with our local brokers.
