Funding your home improvements

An increasing number of homeowners are choosing to add value to their homes through redecoration or renovation rather than upping sticks and moving home.

In the long-term redecorating or renovating your home will more than likely add value but in the short term you will need to raise the finance to fund the project. We’ve looked at the best ways to fund small, medium and large home improvement projects:

• Small Home Improvement projects

If you are just making superficial improvements to your property, such as painting interior walls, buying new soft furnishings or replacing cabinet doors then a credit card is probably your best option. Many lenders are now offering longer periods of 0% finance on purchases giving you plenty of time to make repayments without having to pay high interest charges. Moneysupermarket.com compares the best credit card rates in their comparison chart.

• Medium sized Home Improvement projects

If a credit card won’t cover the costs of your project or you’d prefer a longer loan period then you may want to consider a personal/home improvement loan. One in five personal loans are taken out for home improvements and they can be a great way of raising the finance needed for a project such as a new kitchen. Nationwide currently offer the best rate, 6.6% for loans between £7,500 and £14,999.

• Large Home Improvement projects

If you are looking to undertake a bigger renovation project then you may wish to ask your mortgage provider to renegotiate your loan (remortgage) to free up some finance, this is a good option but should be approached with caution as you need to be careful not to take too much equity out of your property.

 An alternative is to apply for a secured loan (a loan secured against an asset, usually your property). You can get some excellent rates compared to an unsecured personal loan because the lender has some security against your property (sometimes called Collateral Loans). You must make sure that you are able to keep up with repayments though as your home could be at risk if you run into difficulties.

*Rates and offers are correct at the time of publish. Always make sure you only borrow what you can afford to prevent debt issues.