Over half of Canadians have been planning home renovations, according to a recent survey. The most popular space to upgrade for property owners is outside, followed by the bathroom and then the kitchen. If you’re considering renovations for your home, there are some things to keep in mind, such as how you’re going to pay for it.

Paying for Renovations

Before you get started, it is best if you work out the costs of the renovations and come up with a solid plan to pay for them. Here are some of the most common ways that homeowners pay for their renovations:

  • Savings – Planning ahead for renovations you’d like to do on your home can help you develop a savings plan so when you are ready to do the work, you’ll have the money you need.

  • Credit – Some homeowners who are planning smaller remodelling projects will use credit and pay it back over a few months. It’s best to do this only if you are able to pay it off and if the project won’t cost a lot of money.

  • Loans – You may be eligible for a personal loan that you can use for a home improvement project.

  • Grants – Some government money could be available to you, depending on the changes you’re making to your home. The Canada Greener Homes Grant offers thousands to help you pay for energy-efficient upgrades to your home. Alternatively, Toronto homeowners can also access the Ontario Renovates Program for some government funds.

  • Home equity line of credit – Did you know you may be able to leverage your mortgage to help cover the costs of upgrading your home? HELOCs are loans that use your property as collateral. They are revolving credit options, which means you only use what you need. HELOCs also come with lower interest rates. Contact your mortgage broker to find out if this is a good option for you.

  • Home equity loan – A home equity loan, or second mortgage, gives you a lump sum payment that you can use to renovate your property. Like a HELOC, your home is used as collateral. Repayments are made in monthly installments over a period of time. Unlike HELOCs, home equity loans have fixed interest rates. It means you won’t have to worry about fluctuating payments.

  • Refinance your mortgage – Finding extra cash may be as easy as refinancing your mortgage. Depending on how much time you have left in your term, it could save you a lot of money down the road. Ask your mortgage broker about getting lower interest rates and extending your mortgage period.

If you would like to find out more about using your mortgage to pay for your home renovations, you can speak with a mortgage broker in Toronto when you call Northwood Mortgage at 888-492-3690 or contact us here.