Home renovation financing in Ontario: three ways to pay for the work
Whether you are remodeling a kitchen, adding a secondary suite or updating an older home, renovation financing builds your construction costs into your mortgage. Programs such as Purchase Plus Improvements or an equity refinance let you fund upgrades at mortgage rates instead of relying on credit cards or personal loans.
What are the renovation financing pathways?
Purchase Plus Improvements
Add improvement costs, often up to about 10% to 20% of the home's post-renovation value, to your purchase mortgage, so you pay for upgrades as you buy.
Equity refinance
Access up to 80% of your home's current value to fund structural updates, additions or major interior work.
Home equity line of credit (HELOC)
Set up a revolving credit line against your home equity and draw funds as renovation invoices come due.
Run your numbers
How much equity a refinance could unlock, up to 80% of your home’s value, and what is left after paying off debt. Change any value and the result updates as you type.
Credit cards, loans, lines of credit.
OwedAvailable20% stays
Equity you could access
$340,000
- 80% of your home’s value
- $760,000
- Current mortgage balance
- -$420,000
- Left after paying off the debt
- $302,000
A refinance is a new mortgage, so it is tested at the stress test rate, and a prepayment penalty may apply if you break your term early. Estimate only, not a mortgage offer or approval. Rates and terms vary by lender.
How does Purchase Plus Improvements work?
Obtain firm quotes
Gather detailed contractor estimates for the planned work before mortgage approval.
Value appraisal
The lender approves the loan based on the expected "as-completed" market value of the home.
Execution and release
You complete the work, and after a final inspection the lender releases the held mortgage funds to cover those costs.
Questions, answered
Can I include renovation costs in my mortgage when I purchase a home?
Yes. Through Purchase Plus Improvements, qualified buyers can add estimated renovation costs to the total mortgage amount, based on the contractor quotes submitted during underwriting.
How do lenders verify that the renovations are finished?
When the work is complete, an appraiser visits the property to confirm the upgrades match the submitted quotes. After verification, the held funds are released through your lawyer.
Related
Rules and figures current as of October 2026.