5 financing options for your home renovation in British Columbia
Many homeowners postpone or avoid home renovations because of the cost. But this doesn’t have to happen to you. There are financing options available to help Canadians improve their homes without the stress.
If you are considering a home renovation, here are 5 financing solutions that could help you get started soon.
1) Out of pocket or credit card
If your home renovation project is small or easy to complete, you might prefer to pay for the materials and labour yourself. Whether you rely on your savings or a credit card, you can get the job done quickly. However, avoid using all of your savings, because you should keep some money set aside for unexpected costs. And if you finance your small home renovation with a credit, be mindful of high interest rates and try to pay off the balance as soon as possible.
2) Personal loan or line of credit
Consider borrowing the funds for your home renovation. With a personal loan, you could benefit from a lower interest rate and short-term repayment options. If your renovation is an ongoing or long-term project, you could choose a personal line of credit. This will help you avoid paying unnecessary interest, because you only access the funds when you need and pay interest on the amount you use. This option could give you more flexibility throughout your renovation.
3) Home equity loan or mortgage refinancing
With a home equity loan, you are securing the funds with your home’s equity. If you’re considering a major or costly renovation, you could refinance your mortgage and benefit from lower interest rates when compared to a personal loan or credit card. Although mortgage refinancing and home equity loans may require additional time and fees to set-up, you could benefit from low interest rates and flexible repayment terms.
4) Grant and rebate for an energy-efficient renovation
If you’re planning to renovate your home to increase its energy efficiency, you could be eligible for grants or rebates from the federal, provincial and municipal governments. Some local utilities also offer programs to benefit homeowners making energy-saving renovations. For example, if you finance your energy efficiency renovation with CMHC-insured financing, you could be eligible for a premium refund of up to 25% from CMHC Green Home.
5) Grants for seniors
Canada offers multiple home improvement assistance programs to help seniors improve the safety, accessibility and energy efficiency of their homes. For example, low-income seniors and people with disabilities can get financing for home modifications that enable accessible, safe and independent living. Home Adaptations for Independence provides homeowners and renters with forgivable loans up to $20,000 per home. For individuals over 65 who are making certain permanent home renovations, the BC Seniors’ Home Renovation Tax Credit offers assistance with a refundable personal income tax credit.
For more information about financing options for your next home renovation project, consult your lending institution or a financial advisor. Make sure you know all your options and choose the solution that works best for you, your budget, and your long-term plans.
If you need advice or help to create the budget for your home renovation project, give us a call to schedule a consultation.
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