Utilizing Home Equity for Minor Renovations

Getting non-structural renovations done to your home are often key to make your home match your requirements, or lifestyle. Take a read to learn how to best borrow money for these purposes.

Are you considering upgrading your household with new furniture, appliances, or even adding curtains and carpeting?

Leveraging your home equity through a mortgage top-up could be an excellent solution.

When it comes to non-structural home improvements—like furniture purchases, appliance upgrades, curtains, carpets, or even double glazing—you can tap into your home equity and borrow up to 80% of your property value. However, it's important to note that these alterations should not involve any structural changes to the property. Structural changes typically require specific consents and are approached as construction finance, which is distinct from mortgage top-ups.

If you're contemplating a mortgage top-up for, say, $20,000, it's crucial to explore your financing options. While some may consider financing appliances and furniture directly through retailers like Harvey Norman—often lured by interest-free deals—it's best to weigh the pros and cons. Bank financing usually carries lower interest rates compared to personal loans, which can often be higher, ranging from 12% to 15%. Home loan interest rates, in contrast, are usually half that, sitting at around 6-7% (at time of writing). However, it's worth noting that while interest-free deals from retailers may seem attractive, they sometimes come at the cost of paying the ticket price without any discounts.

At NZ Mortgages, our knowledgeable team assists clients in understanding the various financing avenues available for home improvements. We provide tailored advice and guide borrowers in leveraging home equity for furniture, appliances, and non-structural enhancements. Consult our team at NZ Mortgages for expert advice on maximizing mortgage top-ups for your household needs.

Keywords: Home Equity, Mortgage Top-Up, Furniture Financing, Appliance Upgrades, Household Enhancements, NZ Mortgages