Renovating a property is indeed the biggest task to undertake. It involves saving enough and detailed planning of the repairs and improvements you want in the home. You might have questions like? Will it be right to renovate a property if it is on a mortgage? Will the renovations improve the overall value of the residential property?
Do I have sufficient savings to counter the expense? And many more. If you continuously battle these questions and are unable to decide whether you must borrow, the blog may help. It lists the aspects that may help you understand the right take.
Why do individuals consider home renovation loans?
According to a fact, “Pepper Money customer data reveal that individuals consider home renovation the most for a loft conversion. It is because a loft conversion increases the property’s value by 20%.”
Apart from this, homeowners explore the best home improvement loans for the following home upgrades according to the very research:
| Home improvements | Average costs | Increases the home’s value by |
| Kitchen renovation ( full) | €5,000- €50,000 | 5-10% |
| Bathroom Renovation | €5000-€15000 | 60-70% on ROI |
| Loft conversion (bedroom + bathroom) | €15000- €50000 | By 20% (approximately) |
| Converting the garage into a living space | €10,000- €30000 | 10-20% |
When is it ideal to borrow money for renovation?
You can see that individuals consider the major home overhaul while renovations. It is high to undertake such costly renovations. Thus, individuals lacking sufficient savings may struggle to pay upfront. Here, a personalised home renovation loan may help you split the purchase costs. Instead of paying in one lump sum, you can pay in easy and fixed instalments. Here are other reasons to consider a loan for renovating your home:
- Increase the property’s value
It is the prime reason one considers renovating the property. Considering the major renovations, like one mentioned above, may help you get a higher price for your home. Thus, you may consider a nicer property to invest in with that money. Moreover, you can even rent it for a regular and good income by investing in customer-specific renovations.
- Can afford payments comfortably
Taking on an unnecessary debt does not make sense, even if you wish to renovate your house badly. Stability of finances matters the most during a home improvement initiative. If you believe that you can repay what you borrow without defaulting or falling further into debt, you may borrow money.
You can know your repayment capability by pre-qualifying or using a loan calculator. It will help you know the approximate amount you may get, the monthly payments, and the total amount. Accordingly, check whether you may be able to afford the final amount. If not, then it may not be ideal to consider a home renovation loan.
- Low interest rates with good credit scores
If you have been checking the home improvement interest rates for a long time, and they fall, you may consider it. It is because low interest rates mean low monthly payments, and overall, you pay. Moreover, individuals with a good credit score may further fetch better rates.
It can eventually be the best period for you to renovate your home. It is when you have been considering it for a long time. The current average rate on home improvement loans is 6.4% p.a. This is because the Bank of England rate has reduced from 4.25% to 4% in August 2025. Thus, you may refinance your current loan or consider a new one now.
When should you Avoid borrowing money for renovation?
It would not be ideal to consider a long-term home renovation loan in some circumstances. It is especially because it is generally a secured loan. You may lose your home if you fail to repay the dues on time. Therefore, individuals with unstable finances, low income, and inconsistent payment history should avoid it.
Give yourself some time to work on your finances before applying. Alternatively, you may consider an unsecured personal loan for small and unavoidable renovations. Here are other conditions where you must avoid borrowing for home renovation:
- Uncertain income
Ifyou are self-employed, working part-time, or searching for jobs, it may not be the best time to invest in a home renovation. Thus, try to keep it for later. You can also consider quick loans for unplanned but important home repairs. The amount stays low here, and anyone may qualify with basic earning proof. It may be better than a full-fledged home improvement loan in that case.
- Have a bad credit history
Although you may get a loan despite a bad credit history, it is not advisable to do so unless it is extremely urgent. It is because, considering an unsecured loan in this case means getting competitive interest rates. It means you may end up paying more than what you need for the loan. It may disturb your current and future goals. Moreover, skipping home improvement loan payments could have a lasting impact on your credit score.
If exploring online loans for bad credit in Ireland for minor and urgent renovations, don’t worry. You may get a small amount despite low credit scores. It just requires you to have a consistent income and sound finances. Alternatively, getting a high amount like €25000 may require you to provide a guarantor. He acts as a security on the loan payments. If you cannot pay the dues, he will be responsible for clearing them.
- Prioritising luxury over wants
Everyone wishes to lead a “larger than life” standard. However, if you just prioritise luxury over the home improvement requirements or selling goals, then you must halt. A home improvement loan may not be the right thing to consider then. Instead, you can go for short upgrades which does not put your home at risk.
Luxury home improvement may look like:
- Replacing the furniture with trendy ones with the existing ones in top form
- Replacing the bed’s windows with the new ones
- Lift installation at low and unstable salary
Bottom line
Thus, you can consider a loan for home improvement if you can afford to repay it on time. Alternatively, you may consider small and urgent repairs using quick loans.
You can work on your credit score, income, and finances before considering a huge loan like a home improvement loan. Moreover, aspects like increasing the property’s value and benefiting from the low interest rates could be good reasons for considering a loan.
