Fixed-Price Quotes vs Charge-Up Contracts: Which Is Better for Your Renovation?
<body> Q: My husband and I have just received two quotes for our renovation project in Westmere, and they were very different. One builder provided a fixed-price renovation quote, with everything included and clearly broken down. The other builder offered a charge-up contract renovation, where we pay as we go. Their estimate was significantly cheaper than the fixed-price option. What are the benefits of each type of quote?
Understanding the Two Quote Types
In New Zealand, residential construction pricing in NZ is usually quoted in one of two ways:
Fixed-price renovation quote contracts
Charge-up (also called cost-plus-margin) contracts
Both approaches have advantages and disadvantages. It’s important to understand how they work before choosing the right one for your project.
Fixed-Price Quotes
A fixed-price renovation quote gives you certainty. The total price is set out in the contract at the start, so you know what your build will cost before work begins.
Benefits of fixed-price contracts:
Certainty over budget and timeline
Full cost breakdown of materials, labour, and subcontractors
Detailed scope of work, showing exactly what is included
This transparency gives homeowners peace of mind, and it’s one of the main reasons banks often require fixed-price building contracts for lending.
Things to keep in mind:
Renovations can sometimes reveal hidden issues that no one could see until work began (for example, rotten framing or old wiring). If that happens, these will be treated as variations to the contract and priced separately.
At Next Level Construct, we employ two in-house Quantity Surveyor renovation pricing specialists who spend 30–60 hours pricing large projects. Their expertise means our fixed-price quotes are as accurate as possible from the start, reducing the risk of surprises later.
Charge-Up Contracts
A charge-up contract is essentially an educated estimate. The builder provides an indicative cost based on square-metre rates and past experience, but the final price depends on the actual materials, subcontractors, and time spent.
How charge-up works:
You pay for all materials and subcontractors at cost price
The builder adds a margin (their profit) on top
You’re billed as the project progresses
Why it often looks cheaper:
Charge-up estimates almost always come in lower than fixed-price quotes at the start, because they aren’t backed by detailed pricing work.
Risks of charge-up contracts:
Hard to know the true final cost until the project ends (renovation cost overruns)
Projects often run over budget and timeline
Builders may have less incentive to keep material costs down or to finish quickly, since overruns are paid by you
Less accurate because many builders don’t use Quantity Surveyors to prepare estimates
Some homeowners like charge-up contracts for their flexibility, but they can be risky if you’re working within a strict budget.
Which Option Should You Choose?
At the end of the day, the right choice depends on your situation.
If you want renovation cost certainty, clear budgeting, and peace of mind, a fixed-price contract is usually the better option.
If you’re comfortable with flexibility and uncertainty, and trust your builder to manage costs responsibly, charge-up can work, but you must be prepared for possible overruns.
At Next Level Construct, we use fixed-price contracts. This allows us to:
Deliver projects on time and on budget
Handle everything from contractors to council inspections
Give our clients access to our trade discounts on materials and labour
Our goal is to take the stress out of building, so you don’t need to chase subcontractors or worry about hidden costs. Everything is outlined clearly in your contract from the beginning.
Final Thoughts
Both fixed-price and charge-up building contracts have pros and cons, but the most important factor is choosing a builder you can trust. An experienced, professional company will help you understand the risks and guide you through whichever contract type you choose.
FAQ Section
Q: What is a fixed-price renovation contract?
A fixed-price renovation contract sets the total cost of your renovation before work begins. It includes a full breakdown of materials, labour, and subcontractors, giving you budget certainty and peace of mind.
Q: What is a charge-up renovation contract?
A charge-up (or cost-plus) contract is based on actual costs plus a builder’s margin. While it may look cheaper upfront, the final price can increase as the project progresses, leading to potential cost overruns.
Q: Which contract type is better for Auckland renovations?
For homeowners wanting budget certainty and clear timelines, a fixed-price contract is usually the better choice. Charge-up contracts can work if you’re comfortable with flexibility and possible overruns.
Ready to Renovate with Confidence?
At Next Level Construct, we specialise in fixed-price renovation contracts that give Auckland homeowners peace of mind. From detailed pricing by our in-house Quantity Surveyors to managing contractors and council inspections, we make sure your project is delivered on time and on budget.
Get in touch today to discuss your renovation plans and receive a clear, fixed-price quote you can trust.
About the Author
Brendon Sowerby is the founder of Next Level Construct, an award-winning residential construction company in Auckland. With over 17 years in the industry, Brendon and his team specialise in renovations, extensions, and new builds, helping families turn their plans into warm, modern homes.
Got a building question?
Email Brendon directly at: brendon@nextlevelconstruct.co.nz
