8 Best Ways to Finance Major Home Renovations in Toronto

A home renovation can transform your space, increase property value, and improve your quality of life. Whether you're upgrading your kitchen, finishing your basement, or remodeling your entire home, financing the renovation is often the biggest challenge.

With housing costs in Toronto at record highs, many homeowners are looking for smart financing options to fund their renovation projects without unnecessary financial strain. Choosing the right method depends on your budget, renovation scope, and long-term financial goals.

Here are the 8 best ways to finance major home renovations in Toronto.

1. Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) is one of the most popular ways to finance home renovations. It allows homeowners to borrow against the equity in their home and access funds as needed.

How it works:

• You get a revolving credit line based on your home’s equity
• Interest rates are lower than personal loans or credit cards
• You only pay interest on the amount borrowed

A HELOC is ideal for ongoing renovation projects where costs may fluctuate, such as kitchen remodels or basement renovations.

2. Home Equity Loan

A home equity loan provides a lump sum based on the equity in your home. Unlike a HELOC, this is a fixed-term loanwith set monthly payments.

Why choose this option?

• Predictable payments with a fixed interest rate
• Better for large, one-time renovation projects
• Can be used for major structural renovations, such as home additions

A home equity loan is perfect for homeowners who need a fixed budget for a large renovation.

3. Mortgage Refinancing

If you have a mortgage, refinancing allows you to access additional funds by adjusting your existing loan. This means borrowing against your home’s value and increasing your mortgage amount.

Benefits:

• Interest rates are typically lower than personal loans
• You can spread payments over a longer term
• Works well for large-scale renovations

Mortgage refinancing is a good choice for homeowners with significant equity and long-term renovation plans.

4. Personal Line of Credit

A personal line of credit is another flexible way to finance renovations. Unlike a HELOC, it is not tied to your home’s value but instead depends on your income and credit score.

Pros:

• Lower interest rates than credit cards
• Flexible repayment options
• No need to secure against home equity

This option is best for medium-sized renovations, such as bathroom upgrades or flooring replacements.

5. Government Grants and Rebates

Homeowners in Toronto may qualify for government grants and rebates to offset renovation costs. These programs often focus on energy efficiency and accessibility upgrades.

Some programs include:

• Canada Greener Homes Grant – Offers rebates for insulation, heat pumps, and energy-efficient renovations
• Enbridge Home Efficiency Rebate – Provides rebates for improving home insulation and HVAC upgrades
• Toronto Renovates Program – Supports accessibility modifications for seniors and low-income homeowners

Applying for these incentives can help reduce out-of-pocket expenses while making your home more sustainable.

6. Credit Cards for Small Renovations

For smaller renovation projects, such as painting, minor upgrades, or appliance replacements, a low-interest credit card can be a convenient option.

Consider this option if:

• The renovation cost is under $10,000
• You qualify for a low-interest or 0% promotional rate
• You can pay off the balance quickly

Using a credit card for major renovations is not recommended due to high interest rates.

7. Contractor Financing Plans

Many renovation companies and contractors in Toronto offer financing plans to help homeowners manage renovation costs. These plans often include:

• No-interest promotional periods
• Fixed monthly payments
• Flexible loan terms

Looking for a contractor who offers financing? Find a verified professional on RenoAssist.

8. Personal Loans

A personal loan is a straightforward way to finance renovations if you do not have enough home equity or prefer not to refinance your mortgage.

Key benefits:

• Fixed repayment schedule
• No collateral required
• Can be approved quickly

Personal loans work best for moderate renovations where you need a specific budget upfront.

Which Financing Option is Right for You?

Choosing the best financing method depends on:
✔️ The size of your renovation
✔️ Your home equity and credit score
✔️ How quickly you plan to repay the loan

For major renovations, options like HELOCs, mortgage refinancing, or home equity loans provide the best long-term value. For smaller upgrades, a personal line of credit or government rebates may be enough.

Before making a decision, compare interest rates, repayment terms, and total costs to ensure you choose the right financing for your renovation goals.

Looking for trusted contractors for your next renovation? Find and verify professionals on RenoAssist and start your project with confidence.