Kitchen renovations come in all shapes and sizes, from simply replacing the 1970s bright yellow benchtop to a full demolition including upgrading all whitegoods. We spend a lot of our time in the kitchen and if you love cooking, it’s not just the place where you feed the family it’s the place where works of art are created. So how much to spend on a kitchen renovation, when should you do it and how can you pay for it?

The 2019/20 edition of the HIA-GWA Kitchens and Bathrooms Report found that the majority of kitchen renovations (71 per cent) were undertaken in older homes in the 11 to 20 year age group. The kitchen is one of the most high-trafficked rooms in your house, so you can see why people tend to renovate after 10-15 years.

An interesting article in Houzz breaks down the costs of a kitchen renovation from dismantling the old kitchen to plastering, wiring and plumbing and the HIA 2018/2019 puts the average kitchen renovation at $26,280. Costs can vary widely depending on whether you’re going for basic functionality and looking at a flat pack kitchen or whether you are building your dream kitchen. It’s important to factor in replacement of appliances and if you’re planning to sell your house in the next 5 to 10 years then whatever you choose should appeal to the widest range of buyers. Pick neutral colour palettes, a functional layout and don’t over-capitalise.

So, how can you pay for your kitchen renovation?

If you are simply making a few changes to your kitchen, using your savings, a personal loan or paying for the renovation on your credit card might be the right option for you. If you are planning to completely re-do the kitchen or it forms part of a bigger renovation project then you may want to consider refinancing your home loan.

Refinancing to renovate is the most popular reason for refinancing and can be a great way to add value to your property

Look at the sale prices of houses in your area and work out the median property value. It’s a good idea to spend no more than 10% of this value on a renovation, otherwise, you risk over-capitalising.

It’s a good idea to get a valuation done on your home. This will help you work out how much you can borrow. The Loan Value Ratio (LVR) is the value of what you are borrowing as a percentage of your property value that is being used as security for the loan. The lower the LVR, the lower the risk is to the lender.

Use a mortgage calculator or book a free consult with a mortgage broker, to help you figure out the cost of repayments. They can also help you to dot all the ‘i’s’ and cross all the ‘t’s’ when it comes to the paperwork.

Contact the friendly team at ActonLendingSolutions to find out more about refinancing to renovate.