Finance your renovation at mortgage rates — not credit-card rates.
Refinance, HELOC, or Purchase Plus Improvements — there’s a smart way to fund any reno, big or small, at a fraction of unsecured-loan cost. We compare all of them across 100+ lenders for your file.
Home renovation mortgage options — 4 ways to finance a renovation
Refinance / equity take-out
Break or renew into a larger mortgage (up to 80% of your home's value) and pull out equity as cash for the reno. Lowest rate of the options; best for larger projects.
HELOC
A revolving line up to 65% LTV (80% combined) you draw as the project progresses, interest-only. Flexible for phased or DIY renos. See our HELOC page.
Purchase Plus Improvements
Buying a home that needs work? Roll up to $40,000 of renovations into your purchase mortgage at the same low rate — based on the as-improved value. Great for first-time buyers.
Construction / draw mortgage
For major structural work or additions, funds release in stages as work is completed and inspected. Best for gut renovations and rebuilds.
Can I finance renovations into my purchase mortgage when I buy a fixer-upper?
Yes — that’s exactly what Purchase Plus Improvements does. Instead of buying with cash on hand and paying for the reno separately on a credit card, you finance the work into the mortgage based on the home’s as-improved value — the appraised value once your planned upgrades are done. Because it’s an insured program, you can do this with as little as 5% down on the improved value, and you pay your regular low mortgage rate on the whole amount. The lender holds the renovation funds in a holdback and advances them after the work is completed and verified — usually via a final appraisal or inspection — so you fund the contractor from your own resources or a short-term line first, then get reimbursed at closing. It’s the cheapest way to turn a dated listing into your home. See our first-time buyer guide.
Should I refinance my mortgage to pay for a big renovation?
For a larger, well-defined project, refinancing is often the lowest-cost route. You break or renew into a new, larger mortgage of up to 80% of your home’s current value, take the difference as cash, and fold the reno into one payment at mortgage rates rather than unsecured-loan rates. On a $900K home, 80% is $720K; subtract a $400K balance and up to $320K can be freed for the project. Refinancing beats a HELOC when you want rate certainty and a fixed amortization on a known budget, and it beats unsecured borrowing on almost every cost measure. Weigh any penalty to break early against the interest you’ll save — we run that math on your file before you commit. Model it with our refinance calculator, then explore refinancing options.
Is a HELOC a good way to pay for renovations?
A HELOC is the most flexible tool when your renovation is staged, phased, or has an uncertain final budget. It’s a revolving line — typically up to 65% of value on its own, or 80% combined with your mortgage — that you draw as the project progresses and repay interest-only on just the balance you’ve actually used. That’s ideal for DIY work, a kitchen this year and bathrooms next, or projects where quotes are still firming up: you avoid paying interest on money sitting idle. A common, smart sequence is to fund the reno on the HELOC, then refinance to the home’s new higher value once the work is complete and pay the line off at a lower fixed rate. The trade-off is a variable rate, so it suits borrowers who value access and flexibility over locked-in certainty.
How do appraisals, contractor quotes, and lender draws work on a major structural renovation?
Gut renovations, additions, and structural work are usually funded through a construction or draw mortgage, which is built around verification rather than a single up-front advance. The lender orders two appraisal views: the as-is value of the property today and the as-complete value once your plans are built. You provide firm contractor quotes and a scope of work, and the budget is split into stages — for example foundation, framing, lock-up, and finishing. Funds release in draws as each stage is completed and inspected, and the lender retains a holdback (often around 10%, per provincial lien rules) until the work is signed off and lien periods expire. This protects you and the lender from paying for unfinished work, but it means you and your contractor must manage cash flow between draws. We’ll line up the appraisal, draw schedule, and inspections so releases land on time.
How do I choose the right renovation financing for my project?
Match the tool to project size and equity. For a small, defined upgrade rolled into a purchase, Purchase Plus Improvements wins. For a large, known budget where you want rate certainty, a refinance to 80% is usually cheapest. For phased or uncertain work, a HELOC’s draw-as-you-go flexibility fits best. For structural rebuilds, a construction draw mortgage is the right structure. The broker advantage is that we compare all four across 100+ lenders on your actual numbers — not one bank’s shelf — and disclose any fees up front. We can also help you stack energy-efficiency programs where they apply, since some lenders offer better terms or rebates for upgrades like heat pumps, insulation, or windows that lower your home’s carbon footprint. As an FSRA-licensed brokerage (#13737) serving clients in 50+ languages, we’ll structure the borrowing around the project you’re actually building.