5 Ways to Finance Home Renovations

The right home renovation can improve how your space functions, refresh its look and increase your home’s value. The challenge is that even high‑return projects require money upfront. When paying cash isn’t realistic, financing can make renovations possible without draining your savings.

Here are several common ways homeowners fund renovation projects, along with when each option may make sense.

Tap Into Home Equity

1. A home equity loan lets you borrow up to around 85% of your home’s value minus what you owe. Funds are distributed in a lump sum. This option is ideal for large, one-time projects with a clear price tag, like a new roof. Repayment terms can be up to 30 years with fixed rates and predictable payments.

2. A home equity line of credit (HELOC) allows you to draw funds as needed, typically over a period of 10 years. This is ideal for funding ongoing projects where costs may change over time. You only pay interest on what you borrow, but rates are usually variable, making monthly payments less predictable.

3. A cash-out refinance replaces your existing mortgage with a larger loan, ideally at a lower rate. The cash difference can be used for renovations and other expenses. This is good for funding large improvements to a home you plan on keeping long-term.

Explore Non-Equity Financing

4. Personal loans carry higher rates than equity-based options, but don’t require putting your home up for collateral. Approval is also often faster, which is good for funding urgent repairs. Monthly payments, however, may be higher due to shorter repayment terms (typically two to seven years).

5. Credit cards generally carry very high interest rates, especially compared to other financing options. But a card that offers a 0% introductory rate (usually 12-24 months) can work well for funding smaller projects. Just be sure to pay off the balance before the introductory rate expires.

Ready to renovate? Reach out today to explore your financing options.