Match the finance to the project
The right home-improvement finance depends on the cost: a few thousand for redecorating suits different borrowing than a £40,000 extension. The best option balances the interest rate, how the repayments fit your budget, and whether you want to put your home at risk.
1. Unsecured personal loan
The go-to for projects of roughly £5,000–£25,000. Fixed rate, fixed term, no security on your home. Best for kitchens, bathrooms, landscaping and mid-sized work. Pros: fast, predictable, home not at risk. Cons: rate depends on credit; larger sums may not be available unsecured.
2. Secured (homeowner) loan
For larger projects — extensions, loft conversions — a secured loan allows bigger sums over longer terms at lower rates, secured on your property. Best for homeowners borrowing £25,000+ who want lower monthly payments. Your home is at risk if you don't keep up payments.
3. Remortgaging or a further advance
Releasing equity by remortgaging (or taking a further advance from your current lender) can be the cheapest way to fund major work, spreading it over your mortgage term at mortgage rates. Best when you're near a remortgage anyway or have lots of equity. The trade-off is paying interest over a long period.
4. 0% purchase credit card
For smaller jobs you can repay within the interest-free window (often 12–24 months), a 0% purchase card is the cheapest option. Best for projects under a few thousand pounds. Discipline is essential — clear it before the 0% ends.
5. Manufacturer or retailer finance
Kitchen and window companies often offer finance. It's convenient but can be expensive once any interest-free period ends — always compare the total cost against a personal loan before signing.
Which is best for your project?
- Under ~£3,000, repayable quickly: 0% purchase card
- £5,000–£25,000: unsecured personal loan
- £25,000+ as a homeowner: secured loan or remortgage
- Value-adding extension: remortgage to spread cost at the lowest rate
How to find the best home-improvement loan
A whole-of-market broker can compare unsecured, secured and remortgage options to find the lowest true cost for your project size and credit profile. Find a loan broker through Nesto — free, no obligation.
Frequently asked questions
Is a loan or remortgage cheaper for home improvements?
Remortgaging is often the lowest rate but spreads cost over a long term; a personal loan costs more per year but clears faster. Compare total interest, not just the rate.
Can home improvements add enough value to be worth borrowing?
Some do (extensions, extra bedrooms); many don't fully pay back. Borrow because you want the improvement, not purely as an investment.
Do I need a secured loan for a big project?
Not always — some lenders offer unsecured loans up to £50,000 for strong applicants. A broker will tell you what's available unsecured first.
Can I get a home-improvement loan with bad credit?
Yes, at higher rates. Secured options may help homeowners; see our bad-credit loan guidance and compare carefully.
Should I use retailer finance for a new kitchen?
Only if the total cost beats a personal loan. Convenient finance is often pricier once interest applies — always compare.