Planning for a Remodel and Home Renovation Loans

Home remodels and renovations can be an exciting time as they can breathe new life into your home, and can also allow you to customize things to your preference. 

Before you dive in, you should take on a few things in preparation so that your project is less stressful or expensive than you might anticipate.

Planning Your Project

As you begin to plan your project, you should carefully analyze the costs involved. 

In a recent CIBC Home Renovations Poll almost half of Canadians naively underestimated a budget for their renovations and the average was about $10,000. As no surprise, nearly 40% of those projects went over budget. For this reason, proper planning is crucial. 

Presuming you have a room chosen you want to remodel, you want to determine what might be involved for materials. This will allow you to check supply stores for this like tiles, fixtures and more to get an idea of the basic pricing.

You might look into the cost of materials as another way of saving. If you’re planning to remodel your kitchen, you might be thinking marble countertops are the way to go. With a little research you’ll find there are alternatives that will look as good for a fraction of the price.

When starting any sort of home renovations you want to find a contractor that you are comfortable with and compare a few so that you are getting a fair rate. Any sort of reviews and referrals can help you shortlist the possibilities, and going with the cheapest isn’t always the answer. Knowing what you want to do for your remodel project and sharing the details with contractors can get you some quotes. But when doing so, you should always provide the same details for a fair comparison, and consider those reviews too. 

When working with a contractor, they are sometimes able to provide better pricing and you might get and you should ask what they might charge for the supplies. You will need to have already created a list of what you think will be needed for materials to start. 

As you start to think about renovations, you’ll also want to consider how to finance things.


Laying the Foundation for Renovations

Some people choose to renovate because they’ve just moved into a new home and would like to make some changes. For others, it could be that they plan to stay in their home and believe it’s time to invest with some upgrades. 

The rooms that most choose for renovations are usually the bathroom and kitchen. Both see a lot of use, and you’ll likely benefit from any remodels. Since your home is an investment, doing kitchen or bathroom renovations or any kind of home remodeling is often worthwhile. 

WIth a kitchen or bathroom renovation it can often boost the value of your home by as much as 75% to 100% of what was spent on the remodel. 

If you spent $25,000 on a bathroom renovation for a home worth $400,000 the home could increase in value to between $418,750 and $425,000. 

If you were to spend $50,000 for a kitchen renovation and your home was worth $800,000, then the home’s value could increase to between $837,500 and $850,000. 

When it comes to home renovations, where you spend can affect the return your investment. For some it’s a matter of what they want and not looking at it purely from an investment standpoint. But for those that do, these can be important considerations to consider. 


Renovation TypeEstimated Returns
Skylights0 – 25%
Landscaping25 – 50%
Fencing25 – 50%
Exterior Upgrades25 – 50%
Paving25 – 75%
Air Conditioning25 – 75%
Windows/Doors50 – 75%
Furnace Heating50 – 75%
Basement50 – 75%
New Roof50 – 75%
Bathroom Renovations50 – 75%
Kitchen Renovations50 – 75%
Kitchen Counters75 – 100%
Flooring100 – 125%


Carefully choosing any home renovations can increase the value of your home. In some cases it can be due to necessity, depending where you live. If you have an older home in Ontario or another province where the winters are cold and your window seals need replacing or an upgrade, the savings on heating your home can justify things. 

Not everyone doing a remodel is interested in it for the sake of investing in your home and seeking an ROI, most do it to enjoy the improvements and upgrades. But it does make sense to make the right choices, unless you have your heart set on something that you’ve always wanted for your home. Remodels with custom requests might not be ill-advised, but remember that these can be more personal and to your own tastes at times.

RELATED: Personal Loans vs Home Equity Loans 

Financing Your Renovations

When thinking about financing your project, you have the choice of home equity loans or personal loans for home renovations. Unless you already have the funds in your savings, these are the most common options for most. When taking a personal loan you will want to ensure that your credit score will meet the minimum requirements. You might also look into how close your credit score is to meet the next credit band so that you could qualify for even better interest rates. For example, if your score was 690, there is a good chance that if you improve it to be over 700 you may get approved with lower interest rates, which can help you save substantially. 

Not every renovation requires a large overhaul. Sometimes you can make small changes to get results you’re happy with. A fresh coat of paint, new hardware or fixtures, backsplash tiles, new lighting, or new linoleum flooring can sometimes do the job if you have a desire for small changes and don’t need a full renovation or remodel. If you go this route, you’ll likely save if willing to take a DIY approach. Just be cautious about what you think that you can take on, since many jobs really do require a contractor to get the job done properly.

But when you’re looking to make some big changes and considering a remodel for your kitchen, bathroom or other parts of your home, you’ll want to do your homework about many of the things mentioned above so you can avoid costly mistakes.


  • CIBC Home Renovations Poll (2021)
  • RE/MAX Renovation Investment Report (2021)

Making sense of finance one day at a time.