home reno vs home building

home reno vs home building

Time and time again, we get asked by our clients on whether or not they should renovate their existing house or build a new one from the ground up. Along with that question is a follow-up one on whether they should get a loan for home building or home renovation loan.

Let’s take a look at the pros and cons of both sides.

Building a new house

It may seem more expensive at the outset to build from scratch; however, there are grants (especially for first home buyers) that help offset some of the costs. In addition, there are build partners that readily offer you ways in which you can save money during the building process.


  • You don’t have to compromise your ideas to fit an existing structure
  • You can choose a design to suit your needs
  • Being able to see the construction of your house from start to finish will enable you to understand what exactly your home needs in terms of upkeep
  • You can rest assured that there will be no hazardous materials or horrible structural flaws or surprises
  • Everything is brand new, therefore there will be less maintenance hassles
  • The quality of construction and other safety standards have improved since the improvements to building codes in recent years
  • You are compliant with the legal requirements on high energy efficiency, and you can save costs on power and water bills
  • You could qualify for housing construction grants and stamp duty concessions that will help with the construction costs


  • The upfront cost is bigger
  • Planning the construction can be overwhelming, and worst paralysing, since you start on ground zero
  • The project takes longer to finish, hence you will have to pay more money on temporary housing
  • You have limited negotiating power so you may not be able to haggle or talk the builder down when shopping for new construction

Renovating an existing house

It is exciting to pick up an old home and remake it in your own vision. However, a renovation has huge impacts on your lifestyle. 


  • You’re going to take a lesser hit on your wallet because old houses tend to be cheaper
  • Some older homes are very solid as they are made of timber, brick, and stone — built to last generations
  • It takes lesser resources to re-imagine a house with an already existing framework as opposed to building entirely from scratch
  • Renovating the property can add a large investment value to its original home price
  • You can section off areas so you can stay in your home while the renovations are underway


  • There may be some hidden extra costs to renovating that will only be uncovered once the project commences, e.g., new plumbing, earthworks, roofing, wiring, etc
  • Some old homes may contain toxic elements like asbestos and lead
  • You will have to account for noise disruptions or restrictions and waste disposal
  • There is the danger of overcapitalising and spending more than the property will be worth, especially if you plan on selling in the near future
  Speak with a home loan specialist


Renovation loan Australia

Both home renovation and homebuilding are major projects. While we always tell our clients that the answers to these questions depend on their individual circumstances, there are aspects that must be reviewed before committing to any of these.

If you decide on undertaking renovation and want more information on loans for home renovation, or if you would need help with getting a house renovation loan, the team at Professional Lending Solutions can definitely provide you assistance. 

What is a renovation loan?

A renovation loan is a short term loan for home improvement projects such as kitchen renovation, bathroom renovation, roof repair, etc. Renovation loans are usually available from banks and other financial institutions. The amount borrowed varies depending on the project and the lender’s requirements.

How to get loan for home renovation

A renovation home loan can help you cover costs like council fees, building permits, and a project insurance policy. 

How to get loan for renovation: If you’ve built up sufficient equity in your existing home, then you may be able to refinance your existing home loan to fund your renovation. Alternatively, you could take out a construction loan to cover the proposed renovation works. To determine which option is best, make an appointment to speak with a local broker. 

  Speak with a home loan specialist

The amount you can borrow for your renovation home loan  is dependent on a number of factors, such as expenses, income and current debts. Most lenders will base the size of your home  improvement loan on your capacity to meet monthly repayments.

For any further questions you have around home loans for renovations such as how to apply for renovation loan or what the prerequisites are when refinancing home loan for renovations, we are your go-to renovation loan specialists.

Get in touch today so we can help make your reno dream a reality.

  Book an appointment