Ottawa Mortgage Blog
Your Trusted Ottawa Mortgage Experts
Financing Your Home Renovations
September 26, 2025 | Posted by: Jamie Small - Ottawa Mortgage Broker
Home renovations can add value to your property and make your living space more functional and enjoyable. From kitchen remodels to adding a basement suite, the right home renovation financing in Canada can help turn your plans into reality. While some homeowners can fund projects with savings, many rely on financing to bring their vision to life.Here are three common solutions worth exploring:
Option 1: Using Existing Equity
➣ Best for: Straightforward financing when you already have enough equity in your home.The simplest option is to borrow against the equity you’ve built. This can be done through:
• Increasing your mortgage
• Adding a HELOC for renovations (Home Equity Line of Credit)
• Taking a second mortgage
How much can you borrow? Most homeowners can access up to 80% of their property’s market value, minus the amount still owed on their mortgage. For example:
• Market value = $800,000
• Current mortgage = $400,000
• Maximum financing (80%) = $640,000
• Available equity = $240,000
If your renovation costs $100,000, this method works perfectly and offers the following benefits:
• Straightforward process
• Choose between a lump sum or flexible HELOC
Option 2: Refinance Plus Improvements
➣ Best for: Small to medium projects when current equity isn’t enough.With this option, lenders consider your home’s “as-improved” value rather than its current worth. For example:
• Current value = $800,000
• Planned improvements add $100,000 in value
• As-improved value = $900,000
• Maximum financing is based on $900,000
Note: Funds earmarked for renovations are typically held back and released once the work is completed.
Option 3: Construction Mortgage
➣ Best for: Major renovations or projects over $100,000.For extensive upgrades — such as structural additions, rental suites, or a full rebuild — a construction mortgage may be required. Like the refinance plus improvements option, lenders use the as-improved value, but funds are released in stages as the work progresses.
Common uses include:
• Large additions with structural changes
• Adding a rental or in-law suite
• Full remodels or rebuilds
This solution offers maximum financing potential but comes with added complexity.
We’re Here to Help
Every renovation project is unique, and so are the financing options. Whether you’re looking at a HELOC, refinance plus improvements, or a construction mortgage, our team can help you compare solutions and secure the right fit for your project.Contact me, Jamie Small your Ottawa, Ontario Mortgage Broker to explore your home renovation financing options today.