How do renovation loans work?

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  • Late payment fees
  • Break costs or early termination fees
  • Deferred establishment fees
  • Broker fees (when taking out a loan through a broker, the broker’s service fees aren’t included in the comparison rate, which can be significant)
  • A flat fee (e.g. $499) that applies regardless of the value of the loan 
  • A tiered fee (e.g. $250, $500, $750) based on the value of the loan 
  • A percentage fee (e.g. 3%) based on the total amount borrowed and the credit or risk profile of the customer 
  • A hybrid fee (e.g. $200 + 2% of the loan amount)
  • A fixed fee where the loan is repaid in full any time prior to the end of the loan term (e.g. $500) 
  • A fixed fee where the loan is repaid in full prior to a minimum period (e.g. $250 if full repayment is made less than 2 years into a 5-year loan) 
  • A variable fee based on the amount you would have paid in interest and fees had the loan run to full term
  • Kitchen renovations – A renovation loan can be used for any kind of kitchen renovation or remodel, including cosmetic renovations such as installing new appliances and furniture. Add more cabinets, remodel to suit your lifestyle or instal new splashbacks that pop, it’s for everything including the kitchen sink
  • Bathroom renovations – A renovation loan can take your bathroom from “oh dear” to “oh my.” Update an old bathroom from top to bottom – upgrade taps and plumbing, install a new shower or bath and replace those outdated tiles with your designer choice. You can also add a second toilet or bathroom
  • Bedroom renovations – A renovation loan is perfect when a bedroom needs a quick lift. Bedroom renovations can include new paint and cabinetry, new beds, curtains as well as updated flooring such as carpet, floorboards or tiling
  • Living area renovations – A renovation loan can help you gain that much-needed space, extending your living area for more comfortable family gatherings
  • Backyard renovations – Renovation loans aren’t just for the inside. You can also use them to pay for outdoor improvements that make life outside more enjoyable, like a new garden, those long overdue pavers, a retaining wall, a deck or a pool
  • For adding value — It’s not all about what you get now, a renovation loan can also help you plan for the future. Renovation loans can be used to fund any value-adding renovations. These types of renovations include adding an addition to your house which can boost your property’s overall value and comfort.

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