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Renovation financing for your project
Updating a kitchen, adding a suite or fixing up a home you are buying? We find the right way to pay for it.
- 5-yr fixed
- 4.89%
- 5-yr variable
- 3.70%
Updated Oct 26 · on approved credit · Compare to bank rates
Ways to finance a renovation
There is more than one way to pay for a renovation, and the right one depends on whether you are buying or already own, how big the project is and how much equity you have. Buyers can roll improvements into their purchase mortgage. Owners can refinance, use a home equity line of credit, or, for a new secondary suite, use the federal insured refinance program.
We compare the options and the lenders, and help you plan around when the money is released. Many renovation products pay out after the work is done and inspected, so you need a way to pay your contractor in the meantime.
Your renovation financing options
Purchase plus improvements
Buy a home that needs work and add the renovation cost to your mortgage. The lender releases the improvement funds when the work is complete.
Refinance or home equity line
Use the equity in your home. A refinance gives you a lump sum; a home equity line lets you draw money as the project goes.
Secondary suites
Eligible homeowners can refinance with an insured mortgage of up to 90% of the home's value after the work, if that value is under $2 million, to build a self-contained suite that isn't used as a short-term rental.
How it works
How renovation financing works
Scope and quotes
Get written quotes for the work. Lenders use them to set how much they will lend and to estimate the value after the renovation.
Choose the product
We compare purchase plus improvements, refinancing, a home equity line and the suite program for your project.
Appraisal
The appraiser values the home as it is and, for many products, as it will be after the work.
Funds released
Depending on the product, the money arrives up front, as you draw it, or after the work is inspected.
Frequently asked questions
You have questions — we have answers!
Renovation Loans
Can I add renovation costs to my purchase mortgage?
Yes, with a purchase-plus-improvements mortgage, including an insured one with less than 20% down. You give the lender written quotes before closing, and the renovation amount is added to the mortgage but held back until the work is done and inspected. How much you can add varies by lender and insurer, and it usually suits updates like kitchens, flooring or windows better than major structural work.
Do renovations increase how much I can borrow?
They can. For some products, such as purchase-plus-improvements and the secondary suite program, lenders use the appraiser's estimate of your home's value after the work, which can raise the amount available. The appraiser bases that estimate on your quotes and plans, so detailed quotes help. Not every project adds value dollar for dollar, though, and you still have to qualify for the payments on the larger mortgage.
Should I use a home equity line or refinance?
A home equity line suits projects paid in stages, since you only pay interest on what you have used. A refinance can make sense if you also want a better rate or lower payment, especially at renewal when there is no penalty.
How do I pay my contractor before the money is released?
Plan for it before you start. With purchase-plus-improvements and some other products, the lender releases the renovation money only after the work is done and inspected, so you need another way to cover deposits and progress payments. Savings, a line of credit, or a contractor who agrees to be paid on completion can bridge the gap. For owners, a home equity line avoids the problem, since you draw money as the bills come in.
What counts as a secondary suite for the insured refinance program?
A self-contained unit, usually with its own entrance, kitchen and bathroom, such as a basement suite, a garden suite or a laneway home. You must own the home and live in it, or have a close relative living there, and the property can have no more than four units once the suite is built. The suite can't be used as a short-term rental, and the extra borrowing can't be more than the cost of the project.
Today's rates
Our rates vs the banks'
We shop 50+ lenders, so the rate you're offered isn't limited to one bank's rate sheet. Updated Oct 26.
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Everyone's rate is different. What's yours?
Our job is to find you a competitive rate and terms that fit. Your rate qualification depends on certain factors, such as credit score and home equity, as per Canadian regulations. Get your details fast — there's no cost and no obligation.
- Current variable mortgage rate
- 3.70%
- Current prime rate
- 4.45%
| Term | Bank posted | Our rates | Action |
|---|---|---|---|
| 6 Months | 5.54% | 5.09% | Get this rate: 6 Months |
| 1 year fixed | 5.49% | 4.79% | Get this rate: 1 year fixed |
| 2 year fixed | 5.39% | 4.59% | Get this rate: 2 year fixed |
| 3 year fixed | 6.05% | 4.69% | Get this rate: 3 year fixed |
| 4 year fixed | 5.99% | 4.84% | Get this rate: 4 year fixed |
| 5 year fixed | 6.19% | 4.89% | Get this rate: 5 year fixed |
| 7 year fixed | 6.40% | 5.09% | Get this rate: 7 year fixed |
| 10 year fixed | 6.80% | 5.09% | Get this rate: 10 year fixed |
| 5 year variable | No bank rate | 3.70% | Get this rate: 5 year variable |
Bank posted rates are the big banks' posted rates published by the Bank of Canada (1, 3 and 5 years) and by Dominion Lending Centres (other terms). Some conditions may apply. Rates may vary from province to province. Rates subject to change without notice. Rates change often and depend on your down payment, credit and property; on approved credit (O.A.C.). E.&O.E.
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- Our location525 W 8th Ave #800, Vancouver, BC V5Z 1C6
- Phone number778-838-8005
- Email addressinfo@coastalblue.ca