- Home Loans
Is it time to move… or improve your home?
If your home no longer suits your needs, you might be tempted to upgrade to something bigger or better. Or would it make more sense to stay put and renovate, and get more value sooner from those improvements?
There are pros and cons to both sides, and this guide can help you make the right decision.
Time to move?
If you’re looking for a new lifestyle (seachange, treechange, or just a new community), or you’re seeking the best school options for your children, moving may make more sense. It’s also essential if you just don't have the space to create more room in your home – or if council restrictions mean you’ll be unlikely to get planning permission.
But first add up the costs.
Whether you’re moving or improving, first add up the costs.
We tend to stay in our homes for longer these days, averaging 10.5 years now compared with 6.8 years a decade ago1. The cost of buying and selling could be a factor, with stamp duty and agent fees proportionally increasing as property prices rise. In NSW, you’ll pay more than $40,000 in stamp duty for a $1million house2. Then there’s the actual cost of moving – including storage while you sell.
Are you really ready to renovate?
Renovating can be a highly stressful experience, both emotionally and physically. Many people underestimate the true cost of a major renovation, and you should have a contingency budget for those (inevitable) unexpected expenses. Discovering rising damp, rotting joints or unsafe wiring could add both time and cost to your renovation.
Don’t forget to include architect design and engineering consultancy fees, the Development Approval (DA) process, and the cost of living elsewhere while major works are underway.
Avoid overcapitalising by checking in with your local real estate agent for an appraisal before you commit. If you plan to live in your property for a long time, it’s less important – but you need to be confident you’ll get a return on your investment.
Financing your renovation
Renovating is the most common reason Australians look to refinance. A revolving line of credit is a good way to use some of the equity in your home to pay for your renovation. You’ll only pay interest as you draw down on your credit limit, which is useful with staged construction costs.
Whether you decide to renovate or move, it’s a good idea to talk with your bank first to make sure you have the right loan and budget in place.
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