How to fund home improvements

Here's some inspiration for funding home improvements when you're retired

As time ticks by, you might feel your home deserves an upgrade. While the end result could liven up your living quarters, you may need to find a way to pay for these improvements.

If you're looking for ways to fund a kitchen transformation, conservatory installation, or upstairs upgrade, you've come to the right place.

Use your savings

An alternative way to cover part of home improvement costs is by using your savings. Plus, using your savings to pay for something lasting and meaningful can give you a glow of achievement. Planning your outgoings in detail could help you only lay out what you can afford. Grab some tips on budgeting here.

Using equity release to fund home improvements

If you're over 55, unlocking some of the cash stored in your home could give you free rein to finance that refurb. It may be possible to use your property to cover the cost of your residential revamp by taking out a lifetime mortgage, the type of equity release we offer. A lifetime mortgage is a long-term loan secured on your home. You don't have to make monthly repayments, instead the loan and accumulated interest are repaid, usually from the sale of your home, when you die or go into long-term care, subject to our terms and conditions. A lifetime mortgage will reduce the amount of inheritance you are able to leave and may affect your tax position and ability to claim certain welfare benefits. 

Our lifetime mortgage is designed to be repaid when you (and the second borrower if you have a joint lifetime mortgage) die or move into long-term care, subject to our terms and conditions. However there is an option to make smaller repayments up to 10% per year of the total amount borrowed, without incurring an early repayment charge.

Whether or not you make repayments on the loan, interest continues to roll up until it’s fully repaid. In other words, you pay interest on the loan plus the interest you already owe, which quickly adds up.

Using credit cards

With seemingly countless providers available, some credit cards offer thrifty options to handle big-ticket purchases, including interest-free periods, 0% balance transfers and spending rewards. These could offer a cost-effective way of temporarily zapping interest or fees that you might otherwise have had to pay. 

While these perks can seem appealing, making fewer repayments on a short-term loan can make it harder to balance your regular outgoings. For example, borrowing £6,000 within a credit card's 12-month interest-free period would mean you'd have to pay back £500 a month. 

And once your credit card balance is no longer in its 0%-interest period, costs will stack up based on your issuer's interest rates.

Using loans

A secured loan can run for up to 35 years and uses your home as security— that’s why it's also known as a second mortgage.

Unsecured loans usually run for up to seven years and charge more interest, since lenders tend to view them as higher risk than secured loans. If your credit score's up to scratch, you might still snap up a more reasonable loan than if you have a poor credit rating.

But you can generally borrow a lot more with a secured loan , with some lenders offering up to £500,000, compared to just £25,000 for an unsecured loan.

If you don't keep up with your repayments on secured loans, your home may be repossessed.

Remortgage for home improvements

A remortgage might be a practical way to get your hands on the cash you need for home improvements. You'll borrow on top of your existing mortgage, whether from your current lender or an alternative one. It’s important to remember that you'll have to pay back more than you borrow, and interest builds up on the balance until it's completely repaid.

Remortgaging later in life can be tricky, as lenders' affordability checks consider age and income. For an accurate estimate of your payments, you need to work out how interest stacks up. Your home may be repossessed if you do not keep up repayments on your mortgage.


It's also worth remembering that while a home improvement could increase your home's eventual sale price, that uplift may not exceed the cost of the upgrade. This is especially true if interest rates rise, or house prices fall. Either of these could leave you with negative equity (where your debt exceeds the property's value).

For professional guidance speak to a financial adviser

You can find even more financial advisers using Unbiased

Get specialist equity release advice

Take your first step by arranging a call with a UK-based equity release adviser. You don’t have to commit to anything, it’s just to see if it’s an option for you. And you won’t pay a separate advice fee. Instead, we'll make a commission payment to the adviser on completion of your loan. Here are two ways to get in touch.

  • Call us free

    Ring now and make an appointment with an equity release adviser.

    0800 141 3493

    • Monday to Friday: 9:00am - 6:00pm
    • Weekends and Bank Holidays: Closed
  • Ask us to call you

    Give us your name and number, and an adviser will call you. You can pick a chosen day and whether morning or afternoon is best.

    Request a call back

Your call will be answered by the Aviva Equity Release Advice team, who can provide information and advice on Aviva’s lifetime mortgages only. They're authorised and regulated by the Financial Conduct Authority. 

Calls to 0800 or 0808 numbers from UK landlines and mobiles are free. For our joint protection, calls may be recorded or monitored, and saved for a minimum of 5 years. Our opening hours may be different depending on which team you need to speak to.