Borrowing Options When Renovating A Home | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 25/03/2021

Spring is traditionally the time for homeowners to carry out DIY projects and home renovations and, after a year of being cooped up at home, many will be looking forward to giving their property a refresh.

Although the ideal way to fund home renovation projects is to use existing savings, for many homeowners this is not an option. Instead, consumers can consider borrowing to spruce up their living rooms, update their bathrooms or even add more space with a loft conversion or extension.

Whatever type of home renovation is planned, here are some of the borrowing options available to homeowners to fund their project.

0% purchase credit card

Consumers looking to make small changes to their home, for example updating their sofa or repainting a room, may find that borrowing on a 0% purchase credit card is the best option. A 0% purchase credit card offers an interest-free period in which borrowers can repay the balance. 

The longest interest-free term available in our 0% purchase credit card chart is currently 20 months which is being offered on cards by Barclaycard, Virgin Money, TSB, MBNA Limited and Sainsbury’s Bank. Homeowners considering this option can see all the interest-free deals available in our 0% purchase credit card chart.

Personal loans

Over the last year rates on personal loans have remained highly competitive making it potentially a good option for some consumers looking to borrow money to carry out small renovations on their home. For example, those looking to borrow £5,000 spread across three years can currently get a rate from as low as 3.40% APR, which would result in monthly repayments of £146.17 for the term.

Homeowners considering a personal loan should be aware, however, that the actual rate they are offered, along with if they are accepted for the loan, will depend on their credit score. In addition to this, personal loans are usually only suitable for those looking to borrow a small amount of money. Although they may be a good option for those looking to redecorate a living room or bedroom, those looking to make larger renovations may need to consider a different borrowing option.

One option for those looking to borrow a larger amount is a secured loan. These loans will normally enable homeowners to borrow £20,000 or more, but, unlike a personal loan, if borrowers cannot keep up with monthly repayments it could result in them losing their home. For more information about secured loans visit our secured loans page.


Homeowners currently on their lender’s SVR or who are coming to the end of their fixed rate mortgage deal and who have a good amount of equity in their home, can consider borrowing money through remortgaging.

Depending on how much equity is owned in the home, a remortgage could enable homeowners to borrow enough money to carry out larger renovations than redecorating a room, for example updating a kitchen or bathroom. As well as this, remortgage rates have remained competitively low over the last 12 months, so the rate offered could be lower than that offered on a personal loan.

Remortgaging also has the benefit of the money borrowed being added to the existing mortgage, which means that the homeowner does not have to take out a separate debt but instead will see their existing mortgage repayments recalculated to include the additional borrowing.

Borrowers considering this option should keep in mind however, that the mortgage repayments will be spread over the term of the mortgage, which for some can be 25 years or more, which result in a larger amount of interest being repaid in the long-term compared to a personal loan. In addition to this, those who are locked into a fixed rate term will unlikely be able to remortage without paying a penalty, which could considerably increase the cost of remortgaging - for these homeowners a secured loan may be an alternative option.

Homeowners considering remortgaging to renovate a home can speak to a mortgage broker who will be able to go through the options available to them.

Equity release

Older homeowners wanting to update their home can consider releasing equity from their home through equity release. Equity release allows those aged 55 and over to borrow money using the equity they own in their home, but the loan does not need to be repaid until the borrower moves into permanent care or dies.

The downside to borrowing via equity release is that interest is added to the loan, which can significantly reduce the inheritance left behind when the property is sold. Over the last few years, however, the equity release market has become more competitive which has resulted in lower rates, along with more flexible products with some that allow borrowers to make interest repayments or payback some of the equity release loan. Still, due to the long-term financial impact equity release can have means that it is important to speak to a financial adviser before taking out equity release.

Our guide on equity release provides more information about this type of borrowing and will help you to decide if it is the right option for you.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Cookies will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy