Mortgages

How to finance a renovation in Toronto

There is no single right way to pay for a renovation. The best structure depends on how much equity you have, whether you already own the home, and whether the work happens all at once or in stages.

Refinance for large, one-time projects

Refinancing replaces your mortgage with a larger one up to 80 percent of the appraised value and pays out the difference. It usually carries the lowest rate of the options, with legal and appraisal costs and possibly a prepayment penalty if you break mid-term.

HELOC for staged or uncertain budgets

A home equity line of credit lets you draw only what you use and pay interest on the balance. Rates are variable and higher than a mortgage, but the flexibility fits kitchens, bathrooms, and projects where the final number moves.

Purchase plus improvements when you are buying

This program rolls renovation costs into the mortgage at the time of purchase, based on quotes and an as-improved value. Funds are released after the work is verified, so you need to cover the contractor in the interim.

  • Get written quotes before you finalize the offer
  • Work must be completed within the lender's timeline
  • Best suited to a fixer-upper with clear scope

Draw financing for major structural work

Additions, laneway suites, and gut renovations often exceed what a refinance allows. Construction financing advances funds in stages against inspections, and it is the right tool once the project resembles a build rather than a refresh.

Frequently asked questions

Will a renovation increase my home value by what I spend?
Rarely dollar for dollar. Kitchens, bathrooms, and adding legal living space return the most; pools and high-end finishes return the least.
Can I get renovation funds if I am self-employed?
Yes. We use business financials, notices of assessment, or alternative documentation programs depending on how income is reported.