Borrowing to renovate

If you’re thinking about renovating, topping up your home loan might be a good way to cover the costs. Here's how to prepare, and what else to consider along the way.

4 minute read

If you’re looking at doing up your house, it’s important to understand that renovating isn’t a one-size-fits-all experience. In fact, there are generally two types to consider:  

1. Council Consent not required – this is where you do work that doesn’t require council approval. This may include things like a kitchen upgrade or a small deck, but it’s important to check with your local council so you can be sure whether or not you need their consent to undertake the work.

2. Council Consent required - you’ll generally need consent for bigger or more complex jobs – again, check with your local council to see what’s required. From a borrowing point of view, your lender will need a copy of the consent once you have it and, in some cases, a copy of the build contract or schedule of work. Once the renovation is done, you’ll need to provide a copy of the Code Compliance Certificate (CCC) issued by the Council to confirm that the works have been completed to standard. 

Getting going on borrowing

No matter what type of renovation you’re doing, when it comes to borrowing money your lender will look at a number of things to work out your financial position. This usually means showing proof of your income, financial liabilities (how much you owe), and your living costs to work out what you can comfortably borrow. You’ll also need to provide details of the work you want done, including whether it requires consent or not (you may or may not know this yet).

It’s important that you and anyone else who owns the property has all this information to hand before you start your home loan application. After all, being prepared will make all the difference when it comes to ensuring a smooth process.

In some cases, your lender may need extra information, like a registered valuation to confirm what your property’s value will be after you complete the renovation. This will be the case if you have a higher loan to value ratio (LVR), for example. 

You can find out more about what you need to prepare for an application on our website.

Tips from our expert

BNZ Home Loan Partner Frances Hardy suggests it’s important to talk to your lender at the start of your renovation journey. “Look for someone with a wealth of industry knowledge.” 

Providing all your information upfront can also help prevent any financial hiccups. “It’s important your lender works with you to ensure the final loan costs will fit your budget – no one wants to see you stretched.” 

Next steps

• Check to see if you’re eligible to apply for a home loan top-up online. If you’re a BNZ customer you may be able to apply via the app or by logging in to Internet Banking.
• Check your project has the right insurance in place, either under your existing home insurance policy, or via a Contract Works Insurance policy 
• If you’re looking to do a big renovation, it might be helpful to talk through the details with a home loan expert like a BNZ Home Loan Partner.

Related articles

Related products

Related tools

Apply for a home loan top-up

Find out more

Lending criteria, terms and fees apply.

Internet access required for online banking and the BNZ app. BNZ Internet Banking T&Cs apply. Maintenance sometimes required.

This article is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser. No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this article. Any opinions in this article are not necessarily shared by BNZ or anyone else.