A Guide to Financing Home Improvements in Ireland

Thinking about upgrading your home in 2026? You’re not alone. Across Ireland, demand for home renovations is on the rise. In fact, based on internal research here at Heritage Credit Union, we estimate that there was a 7% increase in demand for Home Improvement Loans in 2024. Whilst we don’t have any hard data on 2025 figures yet, we expect another similar increase.

This demand has been driven by a host of different factors:

• A push for better energy efficiency: check out our Green Loans post where we break down government targets for energy-efficient homes and transport
• Increased availability of grants: There is an abundance of grants available from the SEAI for retrofits and other energy-efficient projects - from individual energy upgrade grants to the National Home Energy Upgrade Scheme
• A large proportion of second-hand home purchases: A large number of home buyers are opting for “second-hand” homes due to the low availability of new builds. Mortgage drawdown data from the Banking and Payments Federation Ireland (BPFI) shows that second-hand properties accounted for 63% of mortgage drawdowns in Q2 2025). The reality is that many of those properties need upgrading or some form of a “personal touch”.
• Lifestyle changes that call for extra space: From remote and hybrid working setups to growing families, more households are adapting their homes to better suit modern living.

When it comes to funding these home improvements, there are actually more financing options than ever before. The thing about this abundance of choice is that, rather than making the decision easier, it can often create more confusion and uncertainty. It’s a classic case of the “paradox of choice” - too many options making it harder to feel confident about the right path forward. If you browse forums like Reddit or Ask About Money, you’ll find countless threads consisting of homeowners debating whether to go with a personal loan, a mortgage top-up, or a green loan with grant support.

That’s exactly why we’ve put this guide together. Our aim is to clearly outline the main ways to finance home improvements in Ireland and highlight which options are most suitable in different scenarios, so you can make a well-informed decision with confidence.

The Best Way to Fund Home Improvements

There’s really no one-size-fits-all answer to the question of how best to fund home improvements. The right option depends on your specific situation and the type of upgrade you’re planning. A small project like new windows or insulation might be suited to a simple loan or grant, while a major extension or full retrofit could call for a larger financing solution like a mortgage top-up.

When deciding which route is best for you, it’s important to weigh up factors such as:

• Project size - minor improvements vs. full-scale renovations.
• Equity in your home - which impacts your ability to remortgage or top up.
• Energy efficiency goals - whether you plan to apply for grants or benefit from green loan rates.
• Grant eligibility - especially for retrofits and sustainable upgrades.
• Repayment capacity - ensuring your monthly commitments remain affordable.

At a glance, the main options available to homeowners in Ireland include:

1. Using savings
2. Applying for grants & government funding
3. Taking out a personal loan with a bank or credit union
4. Opting for a dedicated home improvement loan
5. Choosing a green loan (e.g. Heritage Credit Union Green Loan)
6. Remortgaging your property
7. Arranging a mortgage top-up

Let’s take a closer look at each option - how they work, when they are most suitable, and what to keep in mind before making your choice.

1. Funding Home Improvements with Savings

For those in a position to do so, the easiest way to finance home improvements is by using savings. There are a few obvious advantages to paying for home improvements directly from your savings:

• You don’t have to pay interest
• There are no monthly repayments
• The funds are available immediately

Using savings tends to work well for small to medium-sized projects, such as redecorating, minor kitchen or bathroom upgrades, or any other project where the costs are manageable without dipping too far into your reserves.

It’s essential to be aware that devoting a significant portion of your funds to a home improvement project will diminish the financial cushion you rely on for unexpected expenses or emergencies. And you also need to be cognisant of inflation - if you’re saving gradually for a larger project, rising building and material costs can quickly erode your purchasing power, leaving you with a bigger gap to cover when you’re finally ready to begin.

When Using Savings is Most Suitable

Paying for home improvements through savings is really only a viable option for homeowners planning smaller or medium-sized projects who want to avoid debt and have enough savings left over to maintain a comfortable emergency fund.

2. Funding Home Improvements with Grants

Another very popular means of paying (at least partially) for home improvements is government grants. According to SEAI,11,910 home energy upgrades were supported through government-funded grant schemes in the first three months of 2025. These grants are designed to encourage homeowners to upgrade their properties, particularly with a focus on energy efficiency and sustainability.

Individual Energy Upgrade Grants are available through the SEAI for one-off projects such as insulation, heating system upgrades, solar PV installations, and heat pumps.

For those tackling older or unused homes, the Vacant Property Refurbishment Grant can provide valuable assistance with restoration costs.

In addition, SEAI’s One-Stop Shop service allows homeowners to access multiple grants alongside a fully managed retrofit process, making it easier to complete larger projects. The key advantage of grants is that they don’t need to be repaid, reducing the overall cost of the works.

The reality is though, that grants rarely cover the full cost of a project, meaning homeowners often need additional financing to bridge the gap. Most schemes also require the use of approved contractors and involve paperwork, assessments, and BER certification, which can lengthen the process. In many cases, it makes sense to combine grant funding with a loan, giving access to both financial support and the capital required to complete the work.

When Government Grants are Most Suitable

Grants are the best fit for homeowners planning energy-efficiency improvements aimed at boosting their BER rating, or for those renovating older, vacant, or derelict properties where government support can make a significant difference to affordability.

3. Funding Home Improvements with a Personal Loan

Often, one of the first options that comes to mind for funding home improvements is a personal loan from a bank or credit union. Typically, a standard personal loan will be unsecured (meaning you don’t have to use your home as collateral), and they typically come with fixed repayment schedules that make budgeting pretty straightforward. While they usually carry higher interest rates than secured borrowing, the flexibility and speed of access can make them an attractive choice for the right projects.

One thing to keep in mind is that rates can vary significantly between lenders and typically will be higher for a standard personal loan as opposed to a loan tailored specifically for sustainable or “green” projects. Approval will usually depend on your income, credit history, and overall repayment capacity, so it’s worth comparing offers and understanding the conditions before committing.

When a Personal Loan is Most Suitable

Personal loans are an option for borrowers who may not have equity in their home  or who simply prefer not to secure borrowing against their property. They may be suited to small to mid-sized projects that don’t necessarily impact a home's energy efficiency, e.g. bathroom upgrades or a new kitchen. Very often, though, banks and credit unions will have a more specific “Home Improvement Loan” product that may have more appropriate terms and conditions for home improvement projects… which brings us to our next option…

4. Funding Home Improvements with a Home Improvement Loan

As we’ve mentioned already, banks and credit unions nowadays tend to provide loan products specifically designed for home improvements. These can be more cost-effective than general personal loans, sometimes offering lower interest rates or flexible repayment options that reflect the size and nature of renovation projects.

Depending on the amount borrowed and the institution, they may be unsecured for smaller sums or secured against your home for larger loans. These days, most lenders also provide “green” versions of these products (see the next section for more on these), rewarding energy-efficient upgrades with even better rates.

Before applying, it’s important to look closely at the terms. Some lenders charge arrangement fees or apply penalties for early repayment, which can add to the overall cost. Because rates and conditions vary widely, comparing options across different banks and credit unions is the best way to ensure you’re getting good value for your project. At Heritage Credit Union, we offer our members an unsecured Home Improvement Loan with an interest rate of 7.9% APR, no penalties for early repayment and flexible repayment terms.

When a Home Improvement Loan is Most Suitable

Home improvement loans are a strong choice for mid to large-sized projects due to favourable rates over standard personal loan rates and repayment terms tailored more specifically to renovation work.

5. Funding Home Improvements with a Green Loan

Green loans have become more and more popular in recent years. According to the Banking & Payments Federation Ireland (BPFI):

“The value of green personal loans jumped by 18.6% in 2024 to €32 million while the number of green loans rose by 6.3% over the same period to 1,329.”

As our lending manager, Niall, puts it: “A green loan is a type of personal loan designed to support environmentally sustainable projects / investments. These loans are often used for home improvement projects like insulation, heating system upgrades, solar panels, and other improvements that boost a home’s energy efficiency and BER rating. Green loans are also available for projects like electric vehicles or other initiatives that reduce environmental impact.”

While many lenders place strict conditions on eligibility for green loans (such as requiring a BER certificate or proof of SEAI grant approval) the Heritage Credit Union Green Loan takes a simpler, more flexible approach.

With borrowing available from €1,000 up to €150,000, members can finance a wide range of projects, from home energy upgrades like solar panels, heating controls, or new windows and doors, to electric or hybrid vehicles and EV chargers. Terms extend up to 10 years for home improvements, and competitive tiered interest rates mean that larger projects over €20,000 benefit from even lower rates.

Added advantages include a quick and straightforward approval process, flexible repayments, no hidden fees, no penalties for early repayment, and Loan Protection Insurance at no direct cost to members.

There are, however, a few practical considerations. You’ll need to be a member of Heritage Credit Union to apply, and larger loan amounts may require documentation such as quotes from contractors or suppliers. And, as with any borrowing, failing to meet repayments could affect your credit rating.

When a Green Loan is Most Suitable

A green loan is best for homeowners planning energy-efficiency upgrades, those who don’t qualify for SEAI grants but still want to improve their homes, or those who want to combine financing with grant support to cover any shortfall. For larger retrofit or renovation projects, the Heritage CU Green Loan offers particularly strong value thanks to its discounted rates on loans above €20,000.

6. Funding Home Improvements Through Remortgaging Your Property

Remortgaging involves replacing your existing mortgage with a new, often larger one, in order to release funds for renovations. This can provide access to a substantial lump sum, making it a popular route for financing major projects such as extensions, full refurbishments, or large-scale retrofits. In some cases, switching lenders may also allow you to secure a more competitive interest rate, which can reduce overall borrowing costs.

That said, remortgaging comes with important considerations. Legal and valuation fees can add up, and if you’re leaving a fixed-term mortgage early, there may be repayment penalties to account for. It also means extending your mortgage term and increasing your overall debt, so it’s worth weighing up the long-term financial impact before committing.

When Remortgaging is Most Suitable

Remortgaging is best suited to homeowners with substantial equity in their property who are planning large, costly projects. It's also a good fit for those who can secure a more favourable mortgage deal with a new lender that outweighs the costs of remortgaging.

7. Funding Home Improvements Through a Mortgage Top-Up

A mortgage top-up allows you to increase the balance of your existing mortgage to release funds for renovation work. Because this borrowing is secured against your home, interest rates are often lower than those available on personal loans, and the repayments are spread over the remaining term of your mortgage. This makes it a cost-effective way to access larger sums for improvements without having to remortgage entirely.

Bear in mind, though, that topping up your mortgage does mean increasing your overall mortgage balance and extending the repayment term. As with any secured borrowing, your home could be at risk if you don’t keep up with repayments, and the extra monthly costs may reduce your flexibility for future borrowing. Careful budgeting is essential to ensure the repayments remain affordable.

When a Mortgage Top-up is Most Suitable

Mortgage top-ups are typically a good fit for mid to large-scale projects, particularly for borrowers who already have a favourable mortgage rate and want to avoid the extra fees and processes involved in switching lenders.

Home Improvement Financing Options Compared

As we hope we have outlined, there is no single “best” way to finance a home improvement project. It all depends on the scale of the work, your personal circumstances, and your long-term goals. For smaller upgrades, savings or a personal loan might be the simplest choice. For larger renovations, remortgaging or a top-up could provide the funding you need. And for energy-focused projects, government grants and green loans are designed to make sustainability more affordable.

Heritage Credit Union’s Green Loan offers a flexible, community-focused option for members who want to invest in energy-efficient upgrades without the hassle of grant applications or requirements to prove BER impact. It is also a great option to combine with government grants to maximise value. It’s designed to remove common barriers, keep borrowing straightforward, and reward members who are investing in a greener future.

If you’d like to see how a Green Loan would suit your particular requirements, you can use our Green Loan Calculator. And, as always, feel free to get in touch with us for personalised advice on the best option for your project.