Thinking of Renovating? Here’s How to Use Your Home Equity Wisely
July 18, 2025 | Posted by: Keith Leighton
Thinking of Renovating?
Here’s How to Use Your Home Equity Wisely
Summer is renovation season across Atlantic Canada. With warmer weather and longer days, many homeowners take on long-awaited improvement projects. Whether you are planning a kitchen remodel, finishing a basement, or adding a backyard deck, your home equity might be a smart way to help fund those plans.
Before you dive in, it is important to understand how to tap into your home equity and use it wisely. Here is what you should consider:
What is Home Equity?
Home equity is the difference between your home's current market value and the remaining balance on your mortgage. As your home appreciates and your mortgage balance decreases, your equity grows. This value can be accessed through options such as a home equity line of credit (HELOC), a refinance, or a second mortgage.
Why Use Home Equity for Renovations?
Renovating with home equity can be a good choice because:
- - Interest rates are often lower than using a personal loan or credit card
- - The interest may be tax-deductible depending on your situation
- - Strategic improvements can increase your home's value over time
That said, renovations should be viewed as an investment. Focus on updates that will improve your lifestyle and also add lasting value to your home.
Top Renovations That Add Value
Not all projects have the same return on investment. Consider:
- - Kitchen and bathroom upgrades
- - Energy-efficient improvements such as windows and heat pumps
- - Curb appeal enhancements including landscaping or siding
- - Basement finishing to increase usable living space
Be sure to get quotes, set a realistic budget, and work with trusted contractors.
Tips for Using Your Equity Wisely
- Have a clear plan: Know your goals and expected costs before borrowing
- Avoid over-improving: Stay within the value range of homes in your neighborhood
- Talk to your mortgage broker: They can help you compare financing options and avoid unnecessary costs
- Keep some equity in reserve: Do not borrow the maximum unless absolutely necessary
Final Thought
Your home equity is a powerful tool, but it should be used with care. If you are considering a renovation this summer, let’s talk about how to make the most of your mortgage and equity. Whether you need to access funds, refinance, or explore alternatives, an Ideal Mortgage broker can help you find the right strategy for your needs.
