Are You Preparing for Major Renovations? How will You Finance Them?
With home prices being simply far too high for many, some homeowners are choosing to renovate their home rather than purchase a new one. So what kind of renovations are they doing? How much are they spending? How much are they paying for those renos? And, are you among the group that’s planning extensive changes for your home?
Four out of ten respondents, 44 per cent, said that they are planning to make major renovations to their home within the next two years. Only 26 per cent said that they would not be making any changes to their home, and 29 per cent stated that they haven’t made plans either way in regards to renovations.
According to the survey, the majority of homeowners (93 per cent) say that they know how they are going to finance home renovations. Most homeowners (62 per cent) will be using cash savings, while 29 per cent say that they will be using a line of credit.
Other forms of financing for home renos included credit cards, government assistance, bank loans, RRSP and other investments, mortgage refinancing, money borrowed from friends and family, and second mortgages. A small percentage, 6 per cent, of Canadians said that they do not know how they will pay for their renos; and an even smaller amount is using other forms of financing for their renos.
David Stafford, Managing Director of Real Estate Secured Lending at Scotiabank says that while it’s easy to get swept away by tile samples and new appliances, budget and financing the project should always be at the forefront of homeowner’s minds when making changes.
“From painting a room to replacing your kitchen, financing a renovation should be based on your goals with budget and timeline being key to the whole process,” says Stafford. “The top three things to remember are: understand what you can afford, have a budget, and stick to your plan.”
But what will homeowners be spending all that money on? Kitchens are still the most popular renovations to be made to homes, followed closely by bathrooms. Basements round out the bottom of the list, as more homeowners are starting to look at finishing their basement to free up more livable and usable space in their home.
Kaz Flinn, Vice President of Corporate Social Responsibility at Scotiabank, says that when deciding on which area of the home to improve, it’s most important to consider replacing and repairing items with energy-efficient ones, so that you can save money in the future, add more value to your home, and all while being kinder to the environment too.
“Renovations can add great value to your home and when you choose environmentally-friendly renovation options, you can save energy, water and money,” Flinn says. “Making your home energy efficient will be a benefit that will continue to pay off over the years. We recommend looking at our Scotiabank EcoLiving Home Energy Savings Calculator to help discover easy steps to make your home eco-friendly.”
What about you? Are you among the many planning significant changes for your home? How do you plan on financing the renos, and what are going to do to your home?