Mortgage process for renovating a house

Renovating your home can be a lot of fun and lets you incorporate the features and style you’ve always wanted. See a step-by-step guide below on how the home loan process works when renovating your house.

1. Understand your financial position and borrowing capacity

Borrowing calculator

Calculate how much you could borrow based on basic information such as salary and financial commitments.

Start your application online

You can start the application process online by completing a short form. Once this is submitted, one of our home loan experts will be in touch to take you through the next steps.

Get a conditional pre-approval

Confirmation that the bank will lend you the amount you need, subject to satisfying certain terms and conditions.

Home loan top-up

Find out more about how you can apply for a home loan top up to finance your renovations.

2. Planning your renovation


Finding the right designer or company

Before you start the renovation process you will want to ensure you find the right designer or company.

Consider how you will manage the project?

There's a lot to consider in managing a complete renovation on your house and depending on the scale of the job, you may decide if this is something you will manage yourself or engage a professional interior designer or project manager to complete on your behalf.

Check your insurance policy

Depending on the value or nature of the renovations that you are about to embark on, you may need to notify your insurance company. Different insurance providers have different requirements so check your policy document or call your insurer.

3. The building contract

Written contracts for residential building work costing $30,000 or more (including GST) is compulsory before work starts, this is a good way to protect yourself and ensures everyone is clear about what has been agreed upon – and what happens if things don't go to plan. It’s a good idea to get your lawyer to review the contract beforehand.

4. Working out your finance options

When you're renovating, your home loan is approved for the full amount, but you draw it down in instalments as the work and costs progress (your contract may set out a payment schedule).

To find out more about how this process works, contact us.

5. Building and resource consents:

  • Depending on your particular home and what you're proposing to build, you may need to obtain a building consent from your local council before any building commences.
  • You may also need to obtain resource consent. In most cases your architect, designer, builder or building company will assist with these applications. If you're going to submit the applications yourself contact your local council for information on how to apply.
  • Whether you're managing the building yourself or not, you should keep a close eye on the building as it progresses. 
  • Ensure you also keep a record of all invoices, variation, payments and correspondence.
  • Now’s also a good time to review or organise your house, contents and life insurance.

6. Managing the completion phase

When the work is finished, make sure that:

  • The project manager leaves the site clean and tidy and that you have any product manuals and guarantees you need.
  • If there have been any structural changes made - a final building inspection should be completed.
  • Ensure that the Code of Compliance Certificate is applied for – this certifies that the building complies with the building code. It's important this is signed off as it could cause problems with your insurance or with resale if you don't have it.
  • Contact your local council for more information on inspection and consent requirements for your area.
  • This is also a good time to update your sum insured amount for your house insurance.

7. Your renovations are complete!

Now that renovation is complete this is an ideal time to review your home loan and ensure it is set up in a way that suits you. Find out about how you can manage your mortgage and see tips on how you can pay off your home loan faster.

ANZ lending criteria, terms and conditions and fees apply.

This material is for information purposes only. Its content is intended to be of a general nature, does not take into account your financial situation or goals, and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommended you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financial product. If you wish to consult one of ANZ's financial advisers, please contact us on 0800 269 296.