9 ways to finance home improvement and repairs

Fixing your home can be expensive, but it may be necessary to help increase your home’s value, make your home more accessible or let you repair unexpected damage. If you don’t have the savings to cover the cost, you can consider a range of different financing options. Learn more about how you can finance your home renovations or emergency repairs below.

Compare financing options for home improvement and repairs

Loan provider	Interest rate	Loan amount	Loan term	Key features	Link
Personal loan	9.99% - 35.00%	$500 – $50,000	3 - 60 months	Instant pre-approval	Go to site
Personal loan	8.99% - 35.00%	$500 – $2,500	3 - 120 months	Instant pre-approval	Go to site
Personal loan	9.99% - 35%	$300 – $35,000	9 - 90 months	Same-day approval and funding	Go to site
Personal loan	8.99% - 34.99%	$500 – $100,000	3 - 12 months	Approval and funding within 24-48 hours
Home equity loan	10.00% - 22.99%	$10,000 – $500,000	Up to 60 months	Quick approval and fast funding
Personal loan	29.90% - 35.00%	$1,000 – $15,000	12 - 60 months	Instant approval, funding in as little as 15 minutes

9 ways to finance home improvement and repairs

We cover 9 different ways you can finance home improvements or repairs, with everything from a personal loan to in-store financing. Discover how these financing types work and what the pros and cons of each are.

1. Get a home renovation or repair loan using a HELOC

• How it works. A home equity line of credit (HELOC) is a revolving line of credit that’s secured by your home. You’ll get lower interest rates with a HELOC, but you could lose your house if you default on payments. Only borrow and pay interest on what you need for renovations, and keep the rest as an emergency fund. Once you make your repayments, you’ll get access to the credit you paid back.
• How much you can borrow. It will usually depend on how much home equity you have and what your credit score is. You may be able to borrow up to 65% of your home’s purchase price or market value with a home equity line of credit.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements, have an acceptable debt-to-income ratio and have a decent amount of equity in your home.

Features of home equity loan to finance home repairs

• How it works. A home equity loan is different from a home equity line of credit. With a home equity loan, you’ll borrow a one-time lump sum and pay interest on the full amount, rather than having access to a revolving pool of funds. The money you repay won’t be available to borrow again and if you want additional funds you’ll have to apply for another loan.
• How much you can borrow. You can borrow a home equity loan worth up to 80% of your home’s value, minus what you still owe on your mortgage. Your lender may move your maximum amount up or down based on your credit score.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements, have an acceptable debt-to-income ratio and have significant equity in your home.

Features of personal loans for home improvement financing

• How it works. Similar to a home equity loan, with a regular personal loan, you’ll borrow a lump sum and pay interest on the full amount. The main difference is that you won’t lose your home if you default on your payments. Whether or not you qualify will depend more on your credit score, unless you secure your loan with another asset such as your investments.
• How much you can borrow. With most unsecured personal loans, you can borrow up to $50,000. You may be able to borrow more if you put an asset such as your savings or investment account on the line to secure your payments.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements, have an acceptable debt-to-income ratio and have equity in assets such as your savings or investment accounts if you choose a secured loan.

4. Use a personal line of credit for home repairs

• How it works. Taking out a line of credit to finance home renovations will give you a more flexible pool of funds to borrow from. As you make repayments, the money becomes available for you to borrow again. Unlike with a HELOC, you won’t need to secure a regular line of credit with your home. Instead, your lender will use your credit score to decide if you qualify.
• How much you can borrow. With most personal lines of credit, you can borrow up to $50,000. The amount you qualify for will depend on factors such as your income and credit score.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements and have an acceptable debt-to-income ratio.

5. Apply for a CMHC home improvement loan

• How it works. This program lets you qualify for a loan for up to 10% of what your home will increase by after you do your home improvements. For example, if your home increases to $550,000 after renovations, you can qualify to borrow $55,000 for improvements. The amount you borrow will be added to your mortgage. This option is only available before you buy your home.
• How much you can borrow. Qualify for up to 10% of your home’s value after you do renovations.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, have a credit score of at least 600, meet minimum income and equity requirements, have a maximum property value under $1 million and have an acceptable debt-to-income ratio.

6. Get home improvement financing through a store

• How it works. Many popular stores offer 0% or low interest financing options to help you pay for the products you want to buy. You’ll usually need to pay the amount you owe back in 6 to 36 months, and you may need good credit to qualify. If the store doesn’t offer a loan, you may be able to qualify for a store credit card.
• How much you can borrow. It depends on the store financing you apply for. Some stores will let you borrow a few hundred dollars while others will let you borrow several thousand dollars.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements, and have an acceptable debt-to-income ratio.

Home renovation loan via store financing

7. Get a home renovation loan through mortgage refinancing

• How it works. You can refinance your mortgage for a larger amount than what you owe and withdraw the difference as cash. You’ll need to get an appraisal to estimate your home’s value. Once you know how much your home is worth, you should be able to borrow up to that amount. Just be aware that your interest rates could go up when you refinance your home to get a cash-out loan.
• How much you can borrow. You can usually borrow the amount of equity in your home minus how much you owe on your mortgage. For example, if you owe $100,000 on your mortgage, but your home is worth $150,000, you can refinance for up to $150,000 and get $50,000 in cash. You then pay back $150,000 on your refinanced mortgage.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements, have an acceptable debt-to-income ratio and be able to get a home appraisal to show proof of equity.

8. Use a low interest credit card to pay for home repairs

• How it works. You can apply for a low interest credit card to fund smaller home renovations. These cards usually come with low or no annual fees and interest rates between 8.99% and 12.99%. You may also be able to pay for home renovations with a regular credit card and transfer your balance to a balance transfer card with a 0% intro rate.
• How much you can borrow. You can borrow up to your credit limit. Depending on your credit score and other factors, you may qualify for anywhere from $500 to $15,000, or more depending on which credit card you choose.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score and income requirements and have an acceptable debt-to-income ratio.

9. Apply for housing expense assistance

• How it works. Housing expense assistance can help borrowers cover their housing expenses such as rent or mortgage payments. These loans can’t typically be used for home renovations, though you may be able to find home repair loans for low income families. Visit 211.ca and select your province for more information on housing expense assistance.
• How much you can borrow. You may be able to borrow different amounts, based on which agency you borrow from.
• How to qualify. Be a Canadian citizen or resident who is the age of majority in your province, meet credit score requirements and show proof that you have low income.

Where can I get home renovation loans in Canada?

You can get home renovation loans in Canada with banks, credit unions, private lenders and government programs.

• Banks. Best for good to excellent credit. These loans come from a trustworthy source and you can qualify for decent rates with good credit. That said, they usually have more strict eligibility criteria than other types of home renovation loans.
• Credit unions. Best for existing credit union members. These loans usually require you to sign up as a credit union member. They may come with slightly lower interest rates than banks and less strict eligibility requirements in some cases.
• Private lenders. Best for bad credit and online loans. These loans usually come with higher interest rates, but you can qualify for home repair loans for bad credit. They’re also typically more convenient than other financing options.
• Government programs. Best for lower cost loans. Many government programs let you borrow loans with better rates and terms. These loans are usually offered by regular lenders, in partnership with the government.

A closer look at bank home improvement loans

RBC home improvement loan

• RBC Homeline Plan. Manage your mortgage and a home improvement line of credit under one plan. You’ll need at least 20% equity in your home to qualify for this option.
• Royal Credit Line. A line of credit can be a good option if your renovations may take a long time, or you plan to reuse your credit after paying it off.
• Mortgage refinancing. Refinance your existing mortgage to get access to funding and take up to 30 years to repay.
• RBC personal loan. A personal loan could be ideal if you need the funds all at once and want a structured repayment plan.
• RBC Energy Saver Loan. Receive 1% off the loan interest rate or a $100 rebate on a home energy audit on a fixed rate installment loan over $5,000.

TD home improvement loan

• Personal line of credit. Borrow between $5,000 and $50,000, and get access to funds to use again as soon as you make your repayments.
• TD Home Equity FlexLine. Borrow up to 80% of your home’s value and make minimum monthly interest-only payments, as you see fit.
• Personal line of credit. Borrow between $5,000 and $50,000, and get a flexible repayment plan.
• Investment secured line of credit. Use your eligible investments to secure a line of credit between $5,000 and $200,000.

BMO home improvement loan

• BMO Home Equity Line of Credit. Borrow up to 65% of your home’s value, starting at $5,000, and borrow and repay funds on your own schedule.
• BMO Homeowner ReadiLine. This lending option lets you apply for both a mortgage and a line of credit at the same time.
• BMO Home Equity Loan. Tap into 80% of your home’s value to pay for large purchases, renovations and more.

CIBC home improvement loan

• CIBC Home Power Plan. Combine your mortgage with a line of credit to consolidate under one simple, low-interest and secured borrowing solution, which can be adjusted to help fund your renovation project and meet your future borrowing needs.
• CIBC Home Power Mortgage. Use this mortgage refinancing package to borrow a set amount for your home renovation or repairs.
• CIBC Personal Loan. Get a home renovation loan with a term up to 5 years.
• CIBC Personal Line Of Credit. This provides you with an open pool of funds that you can draw on at any time, with interest paid only on the amount you use.

Scotiabank home improvement loan

• The Scotia Total Equity Plan (STEP). This plan lets you choose from different Scotiabank credit products such as mortgages, lines of credit and credit cards, all with one easy application.
• Secured ScotiaLine personal line of credit. Borrow between $5,000 and $75,000 when you use your home as collateral.

What are the rates of home improvement loans?

You will pay between 6.99% and 35% in interest with unsecured home renovation loans. The rates you get will depend on factors such as your credit score, income and debt-to-income ratio. If you have a good credit score and a high income, you may qualify for lower rates. You could also qualify for lower rates by securing your loan with an asset or enlisting a cosigner.

Can I get a first-time home buyer renovation loan?

Unfortunately, the first-time home buyer incentive doesn’t extend to home renovation loans. This government incentive helps you pay for a certain percentage of your first-ever mortgage. In return, you’ll need to give the government a share of your home’s future equity. The government won’t allow you to bake any home renovations you need to do into this amount.

How to find the best home renovation loans

Consider the following factors when deciding whether a home improvement loan in Canada is the right fit for you:

• Loan amount. Figure out how much you need to borrow to fund your home renovations. In some cases, you may be able to use the equity in your home to qualify for larger amounts. Just make sure you can afford to pay back what you borrow.
• Interest rates. Compare multiple lenders to find the best rates. Secure your loan with an asset to bring your interest rates down or apply for government financing (such as a CMHC loan). If you only need a small amount, try a low interest credit card. Learn more about personal loan rates in Canada.
• Fees. Avoid lenders that charge extra fees for signing up, repaying your loan or making late payments. Go with a lender that works to keep your loan costs low.
• Repayment period. Pick a repayment term that works for your budget. Shorter terms come with higher monthly payments and less interest over time; longer terms come with lower monthly payments and more interest over time.
• Eligibility criteria. Find a loan that you know you can qualify for before you apply. There’s no use applying for a loan that’s out of your reach – and multiple hard pulls on your credit can bring down your credit score.
• Processing time. Some lenders can disburse your funds on the same day you apply or by the next business day. Other lenders may take several days or weeks to approve your application and disburse your funds. If you’re looking for an emergency loan for home repairs, there are options available but at higher rates.
• Company reputation. Look for a lender with a solid reputation for customer service. Check online reviews on sites like Google, TrustPilot and the Better Business Bureau.

Are there home repair loans for bad credit?

You can get home repair loans for bad credit by following the steps for applying with good credit. Just be aware that you may have fewer options for lenders and you’ll want to check that you meet a lender’s eligibility criteria before you apply.

The main downside of home repair loans for bad credit is that you’ll usually have to pay very high interest rates. That said, you may be able to get lower rates if you secure your loan with collateral (such as your home or vehicle) or sign up with a cosigner.

Pros and cons of home improvement loans

What to avoid with a home improvement loan in Canada

You should avoid the following when taking out a home improvement loan in Canada:

• Borrowing too much. Only borrow the amount you need for your home renovations. Make a budget in advance to figure out how much you might need to pay. If you need funds on an ongoing basis, consider getting a home renovation line of credit.
• Taking the first loan offer. Shop around and compare rates from several lenders to ensure you’re getting the best deal. You should also watch out for hidden fees such as origination fees or closing costs.
• Overusing home equity. If you’re using your home equity to secure your loan, make sure you leave enough room to cover any unexpected expenses or emergencies if you need to borrow again.
• Making late payments. Make sure you can afford your loan before you take one out. The last thing you want is to miss payments, since this could bring down your credit score or leave you at risk of losing your home.

How to get a home improvement loan in Canada

Follow the steps below for how to get a home improvement loan in Canada:

1. Apply for pre-approval. Apply for pre-approval with banks, online lenders and credit unions. Simply provide personal details such as your contact details, job, income and housing information to get the ball rolling.
2. Pick the best personal loan. Compare the loan offers you get back and pick the best fit for your personal needs and budget. Consider loan features such as amount, length of term, fees and repayment requirements.
3. Submit a formal application. Once you choose an offer, you’ll usually need to submit a more detailed application with that particular lender. You can upload or submit loan documents and banking information at this point.
4. Submit to a credit check. For the most part, it’s not possible to get home renovation loans with no credit check. You’ll almost always be required to submit to a credit check since your lender will use your score to decide what interest rates you should pay.
5. Get a final loan offer. Review your loan agreement carefully. Make sure you fully understand the terms and cost of your loan, and keep an eye out for extra fees.
6. Sign and submit. Sign and submit your loan agreement if you’re happy with your contract. With a personal loan or line of credit, you’ll usually get your money via e-Transfer or direct deposit.

Eligibility requirements

Requirements may vary between lenders, however the criteria usually include:

• Be 18 years of age, or the age of majority in your province or territory
• Be a Canadian citizen or a permanent resident with a valid Canadian address
• Have a working bank account
• Meet credit score and income requirements
• For secured loans: Own a home and have a reasonable level of equity in it

Required documents

To apply for home renovation loans in Canada, you may need the following documents:

• Identity documents. Government-issued ID such as your passport or driver’s licence. Some lenders also require you to provide your Social Insurance Number.
• Proof of income and employment. Pay stubs, employment records, bank statements or tax documents.
• Debt-to-asset ratio. Lists of assets and debts to make sure you can qualify for funding.
• Home appraisal for secured loans. Documentation that verifies the market value of your home and how much equity you have in it.

How much do home improvements cost?

Learn how much you can expect to pay for standard home improvements in Canada:

How much home renovation loan can I afford?

When determining how much home improvement loan you can afford, you’ll need to think about factors such as your credit score, income, debt-to-income ratio and the value of your home. Usually, the higher your credit score and income, the more loan you can qualify for. You may also qualify for more money if you have a high amount of equity in your home.

Can I get a home repair loan if I have low income?

You may be able to get a home repair loan if you have low income, especially if you have a good to excellent credit score. You can compare the eligibility requirements of different lenders to see if your income is high enough to qualify. You may also be able to apply for home repair loans for low income families through government programs.

If your income isn’t high enough to qualify, you may want to consider other options. These could include using a credit card, borrowing money from family or friends, starting a GoFundMe or building up your credit score so that your income is less important on your loan application.

Frequently asked questions

• How much loan can I get for a home renovation?

  The amount you can borrow for home renovations will vary depending on factors such as your credit score, income, debt-to-income ratio and the value of your home. You can usually borrow up to $50,000 with personal loans, or up to 65% of your home's equity with secured loans.

• What types of loans can I get for home renovation?

  If you don't own your home, you can use unsecured loans or lines of credit, low interest credit cards, store financing or housing expense assistance in some cases. If you own your home, you can also use secured loans such as home equity loans and lines of credit, mortgage refinancing or government grants and loans for homeowners.

• How do I get a home improvement loan in Canada with no equity?

  If you don't own a home or your home has very little equity, there are still a few home renovation loans you can tap into. These include unsecured loans, low interest credit cards, store financing or housing expense assistance (though this assistance can only be used in rare cases, and usually for home repair loans for low income families).

• What's the difference between a home improvement loan and a line of credit?

  Home improvement loans give you a lump sum of funds to use all at once and you pay interest on the full amount. A line of credit gives you access to a pool of funds you can borrow from repeatedly. You only pay interest on the funds you take out and the money becomes available to use again as you make your repayments.

• Can I get a home improvement loan in Canada if I have a bad credit score?

  You can get home repair loans with bad credit, but you'll likely pay high interest rates and fees. You might have a better chance of being approved if you apply for a secured loan using collateral such as your car or home equity. Learn more about the best bad credit loans.

Written by

Claire Horwood

Associate editor

Claire Horwood was a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee. See full bio

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