How to Use Your Home’s Equity for a Renovation in Ontario

Thinking about renovating your home?

If you’ve been dreaming of a new kitchen, finished basement, or backyard oasis, you might already have the money sitting in your house — in your home equity.

Home equity is simply the difference between what your home is worth and what you still owe on your mortgage. The more you’ve paid down your mortgage (and the more your home has increased in value), the more equity you have.

Let’s look at three main ways Ontario homeowners can tap into that equity to fund renovations.

1️⃣ Home Equity Line of Credit (HELOC)

• Works like a credit card backed by your home.

• You only pay interest on what you use.

• Flexible if you’re doing projects in stages (like bathroom now, kitchen later).

Example: You’re approved for a $100,000 HELOC, but you only need $25,000 for your first project — you’ll only pay interest on that $25,000.

2️⃣ Refinance Your Mortgage

• You replace your current mortgage with a new, larger one and take the difference in cash.

• Great if you want one lump sum upfront for a bigger renovation.

• You can lock in a fixed rate for peace of mind.

Example: If your home is worth $800,000 and your mortgage is $500,000, you could refinance up to 80% of your home’s value ($640,000) and pull out $140,000 in cash.

3️⃣ Second Mortgage

• Works as a separate loan on top of your existing mortgage.

• Often used when refinancing isn’t ideal or if you need funds quickly.

This can be a short-term solution, especially if you plan to refinance again later.

How to Decide What’s Right for You

Ask yourself:

• Do I need the money all at once or in stages?

• Do I want flexible access or a fixed payment plan?

• How long will I take to pay it off?

A good mortgage broker (hi 👋) can help you compare all options side by side so you understand the costs, payments, and long-term impact.

Before You Apply

Lenders will look at:

• Your home’s value and mortgage balance

• Your credit score and income

• Your overall debt load

You’ll likely need an appraisal, recent pay stubs or income documents, and your renovation budget.

Bottom Line

Tapping into your home’s equity can be a smart way to pay for renovations — as long as the project adds value and fits your budget.

If you’re not sure which option makes the most sense, book a quick call and I’ll help you map out the numbers and strategy that work best for your goals.