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Home renovations can be rough on your financial (and mental) health. For a lot of South Africans, a home equity loan will be the biggest personal debt they can incur in their lifetime. And even if you have enough money to fund a proper renovation project, it’s so easy to let the project run away with you, if you don’t plan properly.

Are you tackling your home renovation by yourself? Even if you do consult professionals along the way, ALWAYS keep in mind:

  • Always think “20% extra” – Not bad advice in general, but even more so when it comes to renovations. Whether it’s extra funding, extra materials, extra assistance, always plan for the unexpected. 
  • Always check your priorities for renovating to stay grounded before & during the project – Look out for the ‘Priority Checks’ to consider throughout this article.


STEP 1: Budget Set Up

Priority Check:

What do you hope to achieve with this project? Is it an addition that will increase the value of the property, or is it a luxury space for your own enjoyment only?

Start off by defining your scope and reason for renovating. Then assess the current condition of your home, as older houses might have other possible dormant issues that need to be looked at before a renovation can even start.

If you are doing this with your property value in mind, also consider your home’s relative value against the rest of the neighbourhood. If you’re planning to sell, then you don’t want your home to out-value your neighbourhood.

Set a boundary limit for what you are willing to spend on the entire project, when all the bells and whistles are considered.

STEP 2: Consider Credit Options

Priority Check:

Weigh up how much you earn and calculate in your monthly expenditures, before deciding on a particular type of financing.

There are three basic types of loan options you can consider:

  1. Cash-out refinance 
  2. Home equity Loan 
  3. HELOC

Q:    “What is Cash-out refinancing?”

A:    Alump sum loan that you can borrow as a renewed, larger-amount mortgage on your home. Benefits of this agreement include: fixed interest rates; a single fixed amount that’s repayable monthly; can lead to lower mortgage rates and an increased credit score; it can also provide the opportunity to shorten the terms of your current mortgage.

Q:    “What is a Home equity loan?”

A:    A lump sum loan that you can borrow from the bank under a 10 – 20 year repayment period. Your monthly repayment amount is fixed but the interest rate is much higher than you would pay on your mortgage because of the high-risk factor.

Q:    “What is a Home Equity Line Of Credit?”

A:    NOT a lump sum handed out to you. Instead, the terms of this agreement give you revolving credit (Like a Credit Card, you can get a spending limit, and just repay the amount back that you owe). The conditions of this agreement include adjustable interest rates, which may differ from month to month. Most homeowners though, who have a lengthy period of renovation in mind, opt for a HELOC because of the financial freedom it gives to keep on building.

STEP 3: Consulting Contractors

Priority Check:

When shopping around for Contractor bids, it’s best to: Itemise the bid so you can see what’s being charged for; establish if it’s a fixed or estimate price; ask about which suppliers they work with; request to meet the Job Foreman at a job he’s currently running to see if it’s running smoothly.

By now you should know what type of renovating you want to do, what kind of size you are looking at, and even what type of materials you want to use, right down to the countertops and door knobs.

Now it’s time for contractor shopping. Ensure you give all the contractors the same set of requirements for their bids, so that when they all get back to you, you can compare prices evenly and accurately. Always ask for references of current / previous work.


Priority Check:

Compromise on luxury, not quality – Every step of the way, you have to consider pitting the fanciest materials & tools against the most durable.

Speak to your contractor to assist with cutting down costs on materials where possible:

  • Consider lower-cost alternatives (i.e. laminated countertops instead of granite) 
  • Keep older appliances that are in still in working condition, such as light fittings 
  • Consider playing around with the scale of the project (does it really need to be a 100sqm room when it can cut costs drastically to make it an 80sqm room?) 
  • Where possible, buy materials and appliances yourself, but keep in close consultation with your contractor to ensure they fit the current project.


We offer Easy Consumer Credit to all of our qualifying customers:

  • Up to 36 Months Repayment Options 
  • Credit up to R100,000 
  • Quick & Easy Applications with Same day Result! 

All YOU NEED is:

  • Your latest pay-slip 
  • 3 Months Bank Statement (if self-employed) 
  • Copy of your ID / Driver’s License / Valid Temporary ID Document

Visit our Specialised Contractor’s Counter in-store to find out more about Building on Credit. We also offer tailored Contractor’s Credit for professional builders.

Find out about our Specialised Credit services here

Or get to your nearest BUCO today and speak to a friendly specialist about helping you with your DIY Renovation Budget.

Find your nearest BUCO branch here