How to Afford a Home Renovation

Brad Smith
Written By Brad Smith

Whether you intend to stay or sell your home, you need money to plan and complete a renovation. How to afford a home renovation is always a concern when structuring a renovation, as materials are costly. Even small upgrades can require funding that may be outside the scope of your monthly budget. Larger remodels can easily add tens of thousands of dollars, if not more. 

Here is how to finance and afford a home renovation, turning your home into a dream property.

how to afford a home renovation

Refinance Your Mortgage

Many homeowners refinance their mortgages to afford a major renovation. They withdraw thousands of dollars of equity and are sometimes caught at a worse interest rate. However, those funds are immediately available in an emergency or renovation.

Take Out a Second Mortgage

You can take out a second mortgage on your home to pay for home renovations. It will provide all the cash you need, likely at a lower interest rate than other means. However, the downside is you have double the mortgage payments.

Home Equity Line of Credit

A Home Equity Line Of Credit, or HELOC, leverages your home equity to obtain a line of credit. In a way, it turns your home equity into a credit card arrangement. This allows you to pay off the line of credit over time or be used continually for however long is required.

Personal Line of Credit

An alternative to a HELOC is to set up a personal line of credit not secured to your property. Assuming you qualify, this may be ideal for ongoing renovations or long-term projects where money may have to be taken out later.


A personal loan has a lower interest rate than a credit card and may be another way to afford a home renovation. If your credit history isn’t the best, try a personal loan. Unlike a line of credit, where you can withdraw gradually over time, a personal loan provides you with the full amount.

Similarly, you can also take out payday loans. They work like a personal loan, but you get more flexibility in terms of approval and speed of processing. Ensure you have a repayment plan before taking out the loan.

Use Credit Cards

Credit cards have a high interest rate when you cannot pay everything back in a month or less. Many use credit cards because there are few other options. They will max out on what they have. In a pinch, paying for a renovation with a credit card is easy, but it could bite you later.

Dip into Savings

If your savings can cover your home renovations, even partially, it’s one of the better ways to afford it. No borrowing funds from another entity. No interest. Using your savings keeps you more in control and reduces your future expenditures, paying back what you would have borrowed to pay for your renovation.

Sell Your Assets

If you have high-cost items to sell and recoup funds from – jewelry, electronics, vehicles, clothes, or accessories – this may be a way to make money fast and divert those funds into a home renovation savings account. 

If all you have are small items, put them up for a yard sale or post classified ads for individual items. This can help you save some money to do a small renovation.

Pay As You Go

If you don’t have to get the full remodel or renovation done at once, you can save a little and pay as you go. 

Complete renovation elements, small parts at a time. While this will slow down your remodel, you won’t be overburdened by interest fees and borrowing a large amount of money to fund your project.

Take a Loan with a Friend or Family Member

Asking for a loan with a family member or friend you trust may result in a lower interest rate than through other means. It’s also a chance to get more money on better terms while avoiding a formal lender and having it on record.

Government Tax Credits

Some home renovations may be funded in part by government-led financial assistance and tax credits for specific renovations, particularly eco-friendly renovations. This may be worth looking into as you don’t want to leave grants or financial assistance untouched if available.

Start a Side Hustle and Save

There may be no simple or easy answer to saving and affording a home renovation. Start a side hustle. Become a rideshare driver, a delivery driver, a pet sitter, or turn one of your passions into something that makes money. 

A side hustle can also be like a part-time job, allowing you to work a few extra shifts now and again and set that money aside for home renovations to come.

smith brad omni

Written by Brad Smith

CEO & Lead Interior Designer

Brad Smith is an experienced interior designer and the founder of With a Master's degree in Interior Design from Pratt Institute and a passion for creating safe and healthy living spaces, Brad shares his expert insights and innovative design ideas with our readers. His work is driven by the belief that home is where every story begins.