How to pay for home improvements in 2026

Fed up with draughty windows, squeaky drawers or a dated bathroom? 

Getting work done on your home can be a pricey business: the average renovation spend in the past five years was £52,000, Nationwide estimates. 

If you’re worried whether your savings will stretch, there are several ways to spread payments.

 categories to explain the pros and cons of different payment methods, depending on the size of the job. 

Improvements costing up to £5,000

 (8.9%) with the  for borrowing £5,000 (6.9%), and found that spreading the cost over three years with the loan would accumulate £532 in interest, while with the credit card you would pay £709.d (APR of 26.7%) ya painful £2,358 in interest.0% periods of up to 25 months, 

An interest-free credit card won’t work if you need to pay by bank transfer, or in cash, as you’ll be charged interest on cash withdrawals from day one. 

 repay without incurring interest (as long as 14 months). , on average 3.99% of the sum borrowed; the notable exception is Virgin Money’s 24-month balance transfer card, which offers 12 months interest-free on money transfers, with no fee. 

As with other credit cards you’ll need to make monthly repayments. For both loans and credit cards, wherever possible use lenders’ eligibility checkers before applying. Several applications in a short space of time on your credit report can spook lenders.

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Improvements costing between £5,000 and £25,000

If you’ve just got a new credit card, you may not be given a credit limit high enough to cover such projects. You could instead use an unsecured loan or a secured loan, typically with your home as security. 

 at 5.6%. U

However, bear in mind that you will typically need to repay the loan more quickly: most personal loan terms go up to five years.

Only Tesco Bank currently offers new customers loans that can be repaid over 10 years, of up to £25,000. You’ll need a Tesco Clubcard to get the lowest rates, which are still higher than Tesco loans for periods of less than seven years.

With a secured loan, you could have decades to pay it off. If you have a mortgage, you could borrow more from your lender on your existing deal, or remortgage (just watch out for early repayment charges on your current mortgage). 

Although some charge a fee, many get paid via commission from the lender. The main barriers to getting a secured loan are lengthy affordability checks and a valuation of your home. A small minority of mortgage lenders set an age limit for paying off your mortgage, which is 78, on average. 

 at 7.73% on average,

Improvements costing more than £25,000

You’ll generally need to take out a secured loan for this level of borrowing. It’s vital you work out whether you can afford the repayments, especially if you plan to pay off the debt relatively quickly. Suppose your home is worth £400,000 and you have £100,000 left on the mortgage, with five years remaining on the term.If you selected a five-year fixed remortgage for the remaining five years and borrowed an extra £50,000 to fund home improvements, your monthly repayments would rise by £916 a month to £2,748, based on the best rate (checked 11 February). If you’re 55 or over, equity release with a lifetime mortgage enables you to borrow without making any repayments until the property is sold, you pass away or you move into long-term care.But this means the debt can snowball, and you might not be left with much value in your home to pass on to loved ones (although lenders signed up to the Equity Release Council guarantee you’ll never owe more than the property’s value).If, at the age of 65, you borrowed a lump sum of £50,000, on a house valued £400,000, you would owe £184,250 by age 85. If you had borrowed at age 55, it would be £400,615, due to the extra decade of interest accruing and a higher rate of interest typically charged to younger equity release borrowers (7.18% AER is the best rate, compared to 6.74% for 65-year-olds).

You’re required to take financial advice prior to taking out equity release, so ask the adviser to work out the numbers for you to weigh up.

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source https://www.which.co.uk/news/article/how-to-pay-for-home-improvements-in-2026-ardOB3v8lGXm