Home Improvement Loan

Loans for building and decorating

A home improvement loan is often artificially cheap because of the recognised increase in the value of your home- if you own it. If you don't, expect a standard loan deal to do the job, albeit at a higher premium than a secured loan. At lower amounts, consider the benefits of payment holidays if you'd like a breather before paying.

Home improvements are one of the most popular reasons for getting a loan; and it's usually fairly easy to find a bank to give you the money. There are good reasons for this. If you are the homeowner, (and if you're not, why on earth are you decorating? Your landlord should do it) then chances are that your redecoration or extra building work will add to the value of the house. Unless you have no taste (!), home improvements are likely to cover 50% of their costs across the time they are in place in increased value in the property itself. Pop in a conservatory, swimming pool or extension, and you can usually bet the whole price of any home improvement loan will be covered (please take specific advice over this generalisation though- every case is different).

Because of this, as well as a simple loan, some building societies especially have loans designed specifically for home improvements. If you're paying builders in tranches, you might also take advantage of the products offering a payment holiday, so work can start before you pay anything back.

The other crucial issue with a home improvement loan is whether to go for a loan at all- perhaps a remortgage (also known as a second mortgage) on your house would be more appropriate. Again, the building societies are a good bet- and remember that some will lend you money even if your mortgage is with a different company. Again, shop around for the best deal. Above £10,000 if you have a mortgage it's almost invariable that a second mortgage will be better value than a home improvement loan. However, the remortgage deal will often only be on offer if the requisite home improvements are deemed to be essential to the integrity of the property (although that's an elastic term in its own right!)