How to manage your Renovation Finance DIY

Most lenders for home finance will tack your borrowings onto your existing home loan. IS THIS A GOOD THING?

Well, if you put it on top of your home loan, you’ll increase your payable stamp duty, fees and interest. Will your building insurance increase, etc. I once tried to borrow for a renovation, only to be told that
“it may risk the value of the existing building and that the loan was not as secure as the bank would like”. And I'm in the building trade!

The bank then proceeded to tell me that I may be better of with a personal loan or car loan. Their reasoning was that there would be less complications and their interest in the main building would not be jeopardised. (well, at least on paper).

The main aspects for renovation finance are. :-
* Is the additional loan going to change the current home loan?
* What insurance risks and requirements are there?
* Is a personal loan or car loan easier?
* How many years of repayments?

Amount	Type of Loan	Interest Rate P.A.	Years	Monthly Payment	Interest	Total Repaid
10,000	Home Loan	8.00%	20	83.64	10,073.60	20,073.60
10,000	Personal Loan	13.50%	4	270.76	2,996.48	12,996.48
10,000	Car Loan	11.25	5	219.93	3,195.80	13,195.80
10,000	Private Loan	10.00%	2	461.45	1,074.80	11,074.80