Renovate a home - Home loans

Setting a budget is one of the most important steps in the renovation process and one you should address early on.

First, make an appointment with an ANZ Mobile Mortgage Manager or ANZ home loan specialist to help you work out what you can afford.

Then, once you have an idea of what you'd like to do, ask a builder or architect for an estimate or quote. Be prepared for changes to the estimate and "hidden costs" – build an extra 10%-15% more than you originally anticipated into the plan.

Consider the types of renovation that will increase the value of your property the most.

Some changes will instantly add value - cost-effective options include:

• the kitchen - replacing cupboard doors and handles, adding a dishwasher
• the bathroom - painting the walls and adding newer fittings
• adding a deck, replacing a window with French doors or ranch sliders or removing an inside wall to open up a space
• the garden - planting trees and landscaping
• replacing soft furnishings such as curtains, removing old carpet, polishing timber floors, painting walls and ceilings or painting the exterior.

Renovations that are unlikely to add value to your property include:

• those that are out of character with the home or area
• expensive fittings that are out of character with your home
• those that make your home the most expensive in your street.

With this approach you're committed to using that builder for the duration of your project. This is ideal if you have a builder you like, but you won't be able to put your building plans out for tender to obtain competitive quotes.

A draughtsperson may be able to bring some design flair and technical expertise to your project and may be a cheaper option than an architect. However, their job begins and ends with drawing the plans.

Draughting isn't currently regulated in New Zealand, so anyone can call themselves a draftsperson regardless of qualifications or experience. Check that your draughtsperson is a member of a professional body and has enough experience before they start work on your project.

An architect will translate your requirements into a range of design options. Their creative flair and professional expertise can add considerable value to your building project. Consider using an architect who's a member of the New Zealand Institute of Architects as this gives you an assurance that they're registered and qualified and have relevant experience.

Under a full contract it's the builder's responsibility to oversee the entire project, including sourcing all materials and organising any subcontractors. This type of contract offers the greatest protection by eliminating the chance of cost overruns.

Under a labour-only contract, you're responsible for managing the project, including sourcing materials, organising subcontractors and obtaining building consents - the builder is there just to do the building. Managing a labour-only contract can be a full-time job, so make sure you know what you're doing and have enough time available before you commit to it.

A managed labour-only contract is a cross between a full contract and a labour-only contract. You're responsible for sourcing and buying materials and organising subcontractors, while the builder is responsible for managing the day-to-day building process.

Be aware that you may become the head building contractor with both types of labour-only contract. This means you may unintentionally be liable for anything that goes wrong with the house for 10 years, even if you sell it to someone else.

Talk to your lawyer about these risks before you sign anything.

PIMs are required for all building work and can be prepared by your council on request. Among other things, a PIM will confirm (subject to various conditions) whether you can start your renovation project. Except for internal alterations and minor building projects, you should apply for a PIM before applying for a building consent, as consent usually can't be granted unless a PIM has been obtained.

Resource consent will be required if your plans are likely to affect the environment and is available from your council. If you need resource consent, make sure you get it before applying for a building consent, to avoid having to make costly changes to your proposal.

Building consent is required by law for building work and can be obtained from your council. "Building work" covers any internal or external renovations to your home (or any other buildings on your property), as well as the construction of a new building.

District plan compliance: you are responsible for ensuring your building plans comply with the district plan. A building consent is not enough. Contact your council or planning advisor for help.

Additional controls may apply to building projects on properties that have known hazards such as flooding, are near the coast, contain protected buildings or are subject to special height controls.

Once your renovation is underway, you'll need to arrange inspections at various stages to ensure that your project complies with the Building Code. Once building is completed and has passed final inspection, you'll be issued with a code compliance certificate stating that the minimum requirements of the Building Code have been met.

For medium to large renovation projects

Having a separate loan account for your renovations means you can keep the money for your project separate from your other finances.

Choose ANZ FlexiPlus and you'll be able to access the money as you need it and you'll only pay interest on the amount you use.

This can also be set up as an interest-only loan so you won't have to start repaying the principal until your project is finished.

For small to medium renovation projects

If you already have an ANZ Fixed Rate or ANZ Standard Variable Rate Home Loan, you can apply for a top-up. As long as you meet our normal lending criteria, it can often be arranged very quickly.

For small to medium renovation projects

If you have an ANZ Standard Variable Rate Home Loan, you can use Flexidraw to redraw any extra payments (lump sum or additional regular payments) that you've made in addition to your regular minimum repayment amount. The minimum redraw amount is $1,000 and a redraw fee applies.