Renovation Mortgage Canada

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Renovation Mortgage Canada

If you are interested in improving the market value of your home when you sell it, renovating it could be one of your best options. Renovations can improve a home’s energy efficiency and make it a more luxurious place to live, making it more attractive to buyers willing to pay more for a better living space and lower utilities bills.

Of course, if you’re going to do any significant renovations on your home, you’ll likely need to take out a loan to pay for the job. If you have equity built up in your home and/or you have good credit and are in good standing on your mortgage, you may qualify for a couple of different financing options. 

While some people charge their home renovations to their credit cards, this is usually not the best option, as your interest rates will inevitably be high, and you could very easily max out your credit cards without completing the job. However, you actually have a few very attractive options available to you to finance your home renovations with your home’s equity:

  • HELOC (home equity line of credit)
  • Home equity mortgage Canada
  • Mortgage refinancing Canada

Each of these options has its own advantages and disadvantages, and not all homeowners will qualify for all types of renovation financing. Here’s a table to help you understand your options, what you might qualify for, and which will be best for you.


Type of Loan

Interest Rate

Credit Score

Home Equity





2nd mortgage




Mortgage refinancing

May vary




You should note that refinancing your mortgage can decrease your interest rate dramatically, which could allow you to finance your renovations, but your new interest rate will likely depend on current market rates. Typically speaking, if you take out a second mortgage, you will have a higher interest rate than your first mortgage, but you’ll have a lower interest rate than you would if you were paying for your renovations on a credit card. Your best option is usually going to be a HELOC, as you won’t have to pay interest on any funds that you don’t spend.

Improvements You Can Find With a Renovation Mortgage or Line of Credit Canada

So what can these types of loans help you do for your home? If your family is growing and you need to add onto your home, a home renovation mortgage can help you fund an addition to the house or the funds to convert the basement or attic into a new bedroom or living suite. These funds could also help you:

  • Build out the basement as a rec room or family entertainment area.
  • Turn your guest bedroom into a nursery.
  • Install solar panels in the roof for lower electricity bills.
  • Replace your old HVAC system.
  • Remodel and update your kitchen Canada.
  • Replace aging carpet with hardwood floors.
  • Terrace a sloping yard for more attractive and easier yard work.
  • Build a greenhouse or solarium.
  • Remodel your master bathroom suite.

These are only a few of the endless possibilities for renovating and improving your home with a home renovation mortgage Canada. With the funds from one of these loans or lines of credit, you could do any number of things to improve the resale value of your home so that you can make a great profit on your investment. And you can do it all without accruing a lot of credit card debt Canada. With the help of a good Canada mortgage broker, you can figure out what kind of budget you need for your repairs and updates and what kind of line of credit or mortgage you’re qualified to get.