How to Finance Your House Extension?

Planning a house extension? This is something that many people have been doing or planning during the pandemic and it is easy to see why. It can be very easy to run out of space in the home over the years as your family grows and you acquire more things, plus many people now find themselves working from home ground floor extensions in Melbourne. An extension allows you to increase your living space whether this is for a bedroom, home office, veranda or any other space.

There are many benefits to an extension and it can be a smart way to add value, but it is also a large project to undertake that can cost a lot of money. Fortunately, there are a number of ways that you can finance an extension and there should be one that suits your needs and situation. So, how can you finance a house extension?


Obviously, savings are one option. If you have the money available and will not need it anytime soon, you can use your own savings to finance the extension. Keep in mind that this is an investment and will add value to your home, so it could pay for itself and more down the line.

Secured Loan

For those that do not have savings to cover the costs, a secured loan is often the best solution. A secured homeowner loan would give you the money that is required and use your home as collateral. Obviously, there is an element of risk here which is why it is so important to enter an agreement that you can afford. This can be favourable over an unsecured loan as you get lower interest rates and it is easier to get approved for.


Remortgaging is another good option that involves switching from one mortgage provider to another to a longer repayment plan. This allows you to quickly raise funds to cover the extension, but keep in mind that there is also a risk with this which is why you need to be sure of the costs of the extension before ploughing ahead.

Credit Card

Credit cards can be a good solution for small and medium-sized extensions, but just make sure that you are on a 0% introductory rate otherwise interest could cause the overall costs of the project to escalate and cost you more than is necessary.


If you have family that are in a position to do so, you could borrow from them and this can be a better option than getting external financing. You need to be careful when borrowing from family, though, and make sure that you have an agreement in place for how and when the money will be repaid.

These are the main options when it comes to financing an extension and there is an option for every situation, so hopefully you will be able to find the best way to finance the project.

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