In 2003, the home renovation boom continued unabated, with house-proud Canadians spending a record amount on renovations – $24.6 billion, up 11.5% from 2002, according to Statistics Canada.  The main ways to finance a renovation are cash, credit cards, a line of credit, or refinancing one’s mortgage.  For renovation projects involving a substantial financial commitment, it can pay to restructure your mortgage, allowing you to get the very best borrowing rates by using the equity in your home.  Mortgage rates are at their lowest levels in the past 40+ years making this the most cost effective source of funds. 

A mortgage refinance will allow you to spread your payments over a longer period of time than with a line of credit.  Upon approved credit, you should be able to borrow up to 80% of your home’s value with a conventional mortgage, or up to 95% with an insured mortgage.

This could also be a time to consider consolidating a range of higher interest borrowings such as credit cards and car loan payments with your mortgage refinancing.  An independent mortgage consultant can look carefully at your financing needs and advise you on how best to secure additional mortgage funding.

Ideally, a well-planned renovation can boost your enjoyment of your home and increase its value and equity. 

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