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Home improvement loans

Find out how to finance your home renovation from personal loans to lines or credit.

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Aliyyah Camp

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Emma Balmforth
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Home renovations can improve your lifestyle and add to the value of your property. Unfortunately, home improvements can be expensive. If don’t have enough savings to finance your home renovations, you can consider taking out a home improvement loan to cover the costs. In this guide, we’ll take you through some of the financing options available, as well as the benefits and drawbacks so you can find the right loan for you.

How can I pay for home improvements?

You have a variety of financing options to cover home improvement costs, including:

  • Home equity line of credit (HELOC). This is typically your least-expensive option, since it uses your home as collateral. You can withdraw from your credit line whenever you need to without taking more than you need. How much you’re able to borrow depends on the equity you own in your home — among other factors.

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  • Home equity loan. A home equity loan also uses your home as collateral but it differs from a HELOC in that you get the full amount of the loan upfront and pay it back in installments over the set term period.

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  • Personal loan. If you’d prefer to avoid tapping into your home’s equity, you might want to consider a personal loan. They typically have much lower rates than credit cards and you might be able to borrow up to $50,000 depending on your eligibility. You’ll have to pay back the loan in monthly payments over the term set by your lender.

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  • Credit card. While you likely won’t want to use a credit card to finance your entire home improvement project, it can help pay for furniture and other small purchases like paint. Credit cards tend to come with higher APRs than the other options on this list. However, some cards come with low interest rates that can sometimes match those offered by pricier personal loans.

Example: Jan finishes his basement

Jan has been setting aside money for years in order to finish his basement. He has $10,000.00 but has realized he will need at least another $9,000.00 to pay for contractors and supplies. The physical materials will cost him approximately $14,000.00, while labour will cost around $5,000.00. With an excellent credit score of 810, Jan heads to his bank and is approved for a loan for $10,000.00 – borrowing an extra $1,000.00 will ensure he can cover any unexpected expenses.

Cost of supplies/labour$19,000.00
Loan typePersonal loan
Loan amount$10,000.00
Interest rate5.00%
Loan term2 years
Additional feesOrigination fee of 3.00% ($300.00)
Monthly payment $438.71
Total loan cost$10,729.13

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

What to consider with home improvement loans

If you’re interested in getting a loan for home improvements, make sure you consider the following factors:

  • Security. You need to have enough equity in your home to get a secured loan. Alternatively, you may be able to use a vehicle as security for the loan, such as your car, boat, RV or motorbike, providing the value of the vehicle is sufficient. You will usually need to own the vehicle outright. You can also apply for an unsecured loan, but you may be charged a higher annual percentage rate of interest (APR).
  • Interest rate. This is the amount of interest you’ll pay on the money you’ve borrowed for your home improvements. Secured loans tend to come with lower interest rates than unsecured loans because it’s less of a risk for the lender since you’ve put up collateral.
  • Loan term. A longer loan term will give you lower ongoing repayments, but at the end of the loan term, you will have paid more in interest, making the loan more costly. In contrast, higher repayments and a shorter loan term help keep the overall cost of the loan down.
  • Processing time. Some lenders can disburse your funds on the same day you apply or usually by the next business day. Other lenders may take seven to ten days to approve your application and disburse your loan funds.

Compare home equity lines of credit (HELOCs)

Name Product Interest Rate (APR) Min. credit score Provincial availability Other loans offered
Tangerine Home Equity Line of Credit
Tangerine Home Equity Line of Credit
2.35%
Prime -10
620+
All of Canada
First mortgage, HELOC, Refinancing
Withdraw funds from your HELOC, make payments and pay off your balance in full at any time.
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More Info
Breezeful Home Equity Line of Credit
Breezeful Home Equity Line of Credit
Varies
600
All of Canada
First mortgage, Second mortgage, HELOC, Reverse mortgage, Rent to own
Breezeful is a 100% online mortgage broker that connects borrowers to competitive rate offers from over 30+ banks and mortgage lenders.
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Homewise Home Equity Line of Credit
Homewise Home Equity Line of Credit
Varies
600
Not available in Quebec
First mortgage, Second mortgage, HELOC, Bridge mortgage
Homewise's personal advisors can get you HELOC rates from over 30 banks and lenders.
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More Info
intelliMortgage Home Equity Line of Credit
intelliMortgage Home Equity Line of Credit
Varies
680
AB, BC, NL, ON, PE
First mortgage, HELOC
intelliMortgage is an online mortgage broker that works with over 100+ banks and mortgage lenders across Canada.
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More Info
Loans Canada Home Equity Line of Credit
Loans Canada Home Equity Line of Credit
3.45% - 10.99%
400
All of Canada
First mortgage, Second mortgage, HELOC, Refinancing, Bridge mortgage
Loans Canada connects borrowers with a broker in their area. Bad credit, EI and CERB applicants are considered.
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More Info
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Compare home equity loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
Fairstone Personal Loan (Secured)
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$5,000 - $50,000
60 - 120 months
Must be a homeowner
Min. credit score: 560
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More Info
Use your home equity to get a secured loan up to $50,000 with flexible repayment options and a long loan term. Get a quote without impacting your credit score.
Alpine Credits Home Equity Loan
Alpine Credits Home Equity Loan
10.00% - 22.99%
$10,000 - $500,000
Up to 60 months
Must be a homeowner
Min. credit score: 300
Check eligibility
More Info
Alpine Credits offer home equity loans in amounts from $10,000 to $500,000. Must be a homeowner to qualify. Check eligibility for this loan through LoanConnect.
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Compare personal loans

Name Product Interest Rate Loan Amount Loan Term Requirements Credit Score Link
LoanConnect Personal Loan
LoanConnect Personal Loan
Secured from 1.90%, Unsecured from 5.75%-46.96%
$500 - $50,000
3 - 120 months
Currents debts must total less than 60% of income
Min. credit score: 300
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More Info
An online broker who helps inform clients towards better finances. Get pre-approved by different lenders for unsecured or secured loans in 5 minutes with any credit score.
goPeer Personal Loan
goPeer Personal Loan
8.00% - 31.00%
$1,000 - $25,000
36 - 60 months
Recommended income of $40,000 /year
Min. credit score: 600
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More Info
Canada's first regulated consumer peer-to-peer lending platform offering unsecured loans. Connects creditworthy Canadians looking for a loan with Canadians looking to invest. goPeer strives to offer the most competitive interest rates. Apply in minutes and get a response within 24 hours.
Spring Financial Personal Loan
Spring Financial Personal Loan
17.99% - 46.96%
$500 - $15,000
9 - 48 months
Min. income of $1,800 /month, 3+ months employed
Min. credit score: 400
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More Info
An online lender offering unsecured personal loans and credit builder loans. Those filing for bankruptcy or a consumer proposal can also apply. If you're not eligible for an unsecured loan, you may be offered a loan to help rebuild your credit.
ConsumerCapital Personal Loan
ConsumerCapital Personal Loan
19.99% - 34.99%
$1,500 - $12,500
24 - 60 months
Min. income of $1,900 /month, 6+ months employed
Min. credit score: 600
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More Info
An online lender that provides fast unsecured personal loans. Complete an application in less than 10 minutes and get a decision within 24 hours. For faster loan approval, complete the Flinks bank integration in the app.
SkyCap Financial Personal Loan
SkyCap Financial Personal Loan
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Min. income of $1,200 /month, stable employment
Min. credit score: 550
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More Info
An online lender offering unsecured personal loans to borrowers with a wide range of credit scores. Apply in less than 5 minutes and if approved, receive financing in as little as 24 hours.
FlexMoney Personal Loan
FlexMoney Personal Loan
18.90% - 46.93%
$500 - $15,000
6 - 60 months
Min. income of $2,000 /month, 3+ months employed
Min. credit score: 500
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More Info
An online lender offering flexible unsecured loans. Apply in less than 10 minutes and if approved, receive financing in as little as 24 hours. Pay off your loan at any time.
Loans Canada Personal Loan
Loans Canada Personal Loan
Secured from 2.00%, Unsecured from 8.00% to 46.96%
$300 - $50,000
3 - 60 months
No min. income or employment requirements
Min. credit score: 300
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More Info
An online broker with the largest lender network in Canada. Get matched for free with lenders offering both unsecured and secured loans through one quick application regardless of your financial situation.
Mogo Personal Loan
OFFER
Mogo Personal Loan
9.90% - 46.96%
$200 - $35,000
6 - 60 months
Min. income of $13,000 /year
Min. credit score: 500


Mogo offers a 100-day money-back guarantee. If you're not happy with your loan, pay back the principal and get your 100 days of paid interest and fees back.
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More Info
An online lender who aims for a hassle-free process through same-day unsecured loan approval and funding. Get a loan fast and track your credit score for free.
Fairstone Personal Loan (Unsecured)
Fairstone Personal Loan (Unsecured)
26.99% - 39.99%
$500 - $25,000
6 - 60 months
Able to make monthly repayments on your loan
Min. credit score: 560
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More Info
An online lender with a team dedicated to professional service. Get a quote for an unsecured loan without impacting your credit score. Receive funds within as little as 24 hours. No prepayment fees.
Fairstone Personal Loan (Secured)
Fairstone Personal Loan (Secured)
19.99% - 23.99%
$5,000 - $50,000
60 - 120 months
Must be a homeowner
Min. credit score: 560
Go to site
More Info
Use your home equity to get a secured loan up to $50,000 with flexible repayment options and a long loan term. Get a quote without impacting your credit score.
Loan Away Personal Loan
Loan Away Personal Loan
19.90% - 45.90%
$1,000 - $5,000
6 - 36 months
No min. income or employment requirements
Min. credit score: 300
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More Info
A lender that approves unsecured loans in as little as 20 minutes. Get affordable monthly repayments with any credit score.
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How much do home improvements cost?

By the time you factor in materials and labour, home improvements are pricey. Here’s a breakdown of some of the average costs of common home improvements.

ImprovementWhat it involvesAverage cost
Adding square footageRemoving walls to expand the interior of a home or apartment.$7,000–$100,000
Basement remodelingPutting down a floor, building walls, installing electric and plumbing lines.$10,000–$30,000
PlumbingHiring a plumber to replace old pipes or install new plumbing systems.$30–$50/hour + materials
Electric workHiring an electrician to redo part of your wiring.$28–$50/hour + materials
PermitsGetting permission to start construction.Around $200
Solar energyBuying and installing solar panels$20,000–$35,000

Pros and cons of home improvement loans

  • Carry out time-sensitive repairs. A home improvement loan lets you carry out repairs as soon as possible. Postponing repair work until you’ve saved the money can result in more damage, which can also lead to more expensive repairs.
  • Various loan options. No matter what type of home improvement you’re looking at doing, you have a range of loan options to choose from. These include home equity loans, home equity lines of credit, unsecured or secured personal loans and personal lines of credit.
  • Taking on too much debt. If you apply for a loan you can’t afford to pay off, you run the risk of taking on debt you can’t manage and negatively affecting your credit score if you make late repayments. Make sure you budget for your repayments before you apply for a loan.
  • Finance doesn’t account for renovation budgets or schedule changes. If anything happens that affects the budget or schedule of your renovations, it could impact your ability to make your loan repayments on time. Make sure you have some space in your budget so that you can still make repayments if anything unexpected happens and you need extra funds.

What to avoid with a home improvement loan

You should avoid the following when taking out a loan for home improvements:

  • Unplanned or poorly considered renovation projects should be avoided at all costs. This is especially true if you’re planning to finance it with a loan. Home improvements often involve long and expensive processes, and you need to be financially prepared to cover it.
  • If you think you’ll make late payments on your loan, look for another financing solution. Making late repayments can result in the lender reporting you to the credit bureau, which means your credit score will take a negative hit. Furthermore, your loan will end up costing you a lot more in fees.
  • If you think you may have problems repaying the loan entirely, don’t take one out in the first place. Look for alternate forms of financing, like borrowing money from friends or family.

How to apply for a home improvement loan

You can usually apply for a loan online, however some lenders may also offer phone or in person applications if they have a physical branch location. Before you apply for a loan, you’ll need to make sure you meet the eligibility requirements. If you have the necessary documents on hand, you can usually apply for a loan in around ten minutes or less.

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
  • Have proof of an income
  • Meet any credit score requirements

Required documents

When applying for a loan, you’ll typically need to have the following documents on hand:

  • Personal information. This includes your full name, address, date of birth, email, phone number and Social Insurance Number (SIN).
  • Income details. You will have to provide proof of your income from pay stubs or bank statements.
  • Employment details. You may need to provide the name of your employer and their contact information.
  • Banking details. This includes your bank’s name, address, transit number and your personal bank account number.

Frequently asked questions

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