Smart ways to pay for your home renovation

January 24, 2022 | Posted by: Dino Pupulin

Smart ways to pay for your home renovation


Moving is a lot of work and it’s expensive when you factor in all the costs – legal fees, moving costs, real estate commission, decorating, furnishings, and so much more. Sometimes it just makes more sense to love your home instead of listing it.


If you’re thinking renovation, you’ll want to carefully look at how to finance that transformation. There are generally two financing routes – home equity and unsecured credit.


Our hot housing market has greatly increased home values, and with mortgage rates hovering around historic lows, homeowners with enough equity are seizing the opportunity to tap into that equity to create the perfect home that fits their lifestyle and to further boost long-term value.


You can access your home equity through a mortgage refinance, home equity line of credit, a second mortgage or a program called refinance plus improvements. For smaller projects, many look to unsecured credit like a personal loan, line of credit, or credit cards. Here are the benefits and considerations of each:





1      Your Home Equity

  • lowest-cost funds for a large renovations project
  • Legal and appraisal fees may apply

Mortgage Refinance

  • borrow up to 80% of your home’s appraised value
  • lowest rates
  • use your prepayment privileges to pay reno off faster
  • Penalties may apply for breaking current mortgage and renegotiating a new one

Home Equity Line of Credit (HELOC)

  • Borrow up to 65% of your home’s value
  • Can be paid off at any time with no penalty
  • Can reuse after paid off
  • Mortgage plus HELOC cannot equal more than 80% LTV
  • Higher interest rates than a refinance

Second Mortgage

  • No penalty to break first mortgage
  • Structured repayment
  • More expensive and less flexible than a HELOC.

Refinance Plus Improvements

  • Allows you to refinance up to 80% of the new posts-reno value of your home
  • Lowest rates
  • Generally, you can add 10% of your home’s value to your mortgage, up to the lender’s maximum if applicable

2 Unsecured Credit



Personal Loan/ LOC/Credit Card

  • Best for small projects
  • No legal and appraisal fees
  • Personal loan has structured repayment
  • Highest interest rates
  • Credit card and LOC require a disciplined approach to pay off


If the home of your dreams is one renovation away, let’s discuss which option is best for your situation. I’m here to help you maximize your bottom line and personal home enjoyment.

Dino Pupulin, Mortgage Agent

Mortgage Intelligence

T 416 509 6922

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