Renovation Financing
Renovating is exciting and everyone has a different reason for wanting to renovate. Be it a lifestyle renovation or a maintenance and repair renovation… we can help! More than ever, homes in the inner part of cities across Canada are now being renovated. More and more Canadians are investing money in their current homes. Adding additions to increase kitchen, master bedroom and en suites size are the most common.Planning is the key to a successful renovation which consists of two main components:
1. Selecting a respectable and dedicated Renovation Company
2. Arranging financing (the RIGHT way).
Let’s take a moment to consider the various financing options available to you given a $50,000.00 renovation. The client in this case wants to pay their debt off within 3yrs.
| Comparative Table | In store Credit Card | Personal Credit Card | Financing through a Broker |
| Loan Amount | $50,000.00 | $50,000.00 | $50,000.00 |
| Payment Term | 3 years | 3 years | 3 years |
| Interest Rate | 28% | 18% | 5.25% |
| Monthly Payment | $2,068.18 | $1,807.62 | $1,503.00 |
| Monthly Differential When Compared to Financing arranged through a Broker |
+ $565.18 | + $304.62 | - |
| Total Paid Over the 3 year term | $74,454.48 | $65,074.32 | $54,104.00 |
| Additional Paid Over 3yrs When Compared to Financing arranged through a Broker |
+ $20,350.48 | + $10,970.32 | - |
Conclusion:
- Using the valuable equity you may already have in your home is one of the best ways to raise funds for a renovation project.
- For the Credit cards, if you were to make only the minimum payment, it would take you in the order of 50 years to pay off the debt.. This is twice the time it would take to pay off a mortgage amortized over 25years!
Note:
- When refinancing, appraisal fees (if applicable), and legal fees can all be included in the mortgage amount meaning you have no out of pocket expenses.
- The lowest interest rates are ONLY available through a broker.
- Lines of Credit at PRIME can also be arranged.
DID YOU KNOW?
Renovation financing can be secured prior to you moving into your new home!
Renovation financing can be secured prior to you moving into your new home!
RENOVATION Calculator
If you want to renovate, have a look at this renovation calculator. It will give you an idea as to your return on investment given your chosen project.
If you are thinking selling your home and looking to renovate in order to entice a potential purchaser, our suggestion would be that you contact an appraiser prior to starting any work. They are well equipped to give you advice on where to start and what to do to give you the greatest return on your investment.
