Renovating? The cheapest money you'll find is already in your house.
Most homeowners fund a renovation the expensive way — credit cards, contractor financing, or a line of credit they never pay down. Secured against your home, the same project usually costs half as much in interest. Here's how each route works, what the lending rules allow, and what it costs month to month.
The three real routes
HELOC
A revolving line secured behind your mortgage. Draw only what the trades invoice, pay interest-only, repay whenever. Best for phased or unpredictable budgets.
Refinance
Rewrite the mortgage now for a bigger amount at a lower rate. One payment, long amortization — but breaking mid-term triggers a penalty.
Renewal take-out
Add the renovation money when your term matures. No penalty, lowest total cost, but you have to be able to wait for the maturity date.
There are two more worth knowing about — purchase-plus-improvements on a home you're buying, and a reverse mortgage if you're 55+ and want no payments at all. Both are covered on the options page.
The three numbers that decide it
1. Your equity ceiling. Secured lending against a home in Canada stops at 80% of appraised value, including your existing mortgage. That ceiling, not your wishlist, sets the budget. See equity rules.
2. Where you are in your term. Eighteen months from renewal with a low rate? Breaking it to fund a reno can cost more in penalty than the renovation saves. A HELOC behind the mortgage leaves the good rate untouched.
3. Whether the money gets repaid. Interest-only feels cheap and stays outstanding for decades. Amortized feels expensive and actually ends. Pick deliberately.
Before you spend it, find out what the renovation is actually worth.
Tyler Waldron is licensed as both a mortgage broker (MB611612) and a realtor. So alongside the financing math, we'll tell you honestly what a kitchen, suite, or full addition is likely to return in your South Surrey or White Rock neighbourhood — and when moving is the cheaper renovation.