How to Budget for Your Kitchen Renovation Costs

There is a myriad of reasons why you may want to remodel a kitchen. Perhaps it’s because it’s too old and the fixtures are falling apart, or maybe you are just fed up with seeing the same kitchen design year after year. You may also decide to remodel the kitchen to bump up your home’s value.

A remodelled kitchen will boost the value of your home. Also, there’s no better feeling than a kitchen that feels and looks brand new!  You can install new quartz countertops, refurnish the cabinets, or replace any kitchen appliances for newer models. With these little touches here and there, you can elevate the look and feel of your kitchen.

However, all of these renovations cost money. Before you start tearing up your kitchen, make sure you have access to enough funds to complete the job. Follow these tips to budget for your kitchen renovation costs:


If you have some funds you can spare for a kitchen remodel, great! However, a complete kitchen remodel involves substantial amounts of money, and your reserves may not be enough to meet the costs of a wide-scale kitchen makeover.

Home Renovation Loan

A home renovation loan is a great way of paying for your kitchen renovations. The amounts you might qualify for depend on the value of your home once the renovations are complete. While a good credit score is helpful, some facilities approve loans for borrowers with less-than-impressive credit scores.

Before you apply for a home renovation loan, price out the extent of renovations to understand how much money you need. Next, determine long you plan to pay off the loan.

Credit Card

If the anticipated kitchen renovations are minor, you could pay for them using your credit card. Here, we are talking of kitchen renovations costing under $5,000. A credit card loan is perfect as long as you don’t skip the monthly payments.

Personal Line of Credit

If you plan to spend between $10,000 and $20,000, the best choice is to apply for a line of credit. Instead of raiding your credit cards, a personal line of credit is often the more cost-effective solution for kitchen renovations.

Home Equity Line of Credit (HELOC)

Extensive kitchen renovations costing upwards of $20,000 are best paid for through home equity. Since you have built home equity over the years, why not borrow from it to finance your renovations? In some instances, you can borrow up to 90% of the value of your home’s equity.

The problem with a HELOC is that it merges with the initial mortgage. For instance, a home valued at $400,000 at 90% gives you $360,000. If your current mortgage debt is $300,000, the maximum HELOC you can get is $60,000, calculated at $360,000 less $300,000.

The advantage of a HELOC is that it attracts lower fees than a refinance. While rates are slightly higher than those for a first mortgage, they are adjustable and sometimes tax deductible, but only if you will use the money to improve or buy a home.

Cash-out Refinance

If you have a great credit score, a cash-out refinance would take care of your kitchen renovation needs better than a HELOC. Once you receive the funds, typically up to 85% of your home’s value, you are required to make payments right away.

The only problem is that this will extend the payment period of your mortgage, something you need to think about before applying for a cash-out refinance facility.

Payday Loan

A payday loan is variously referred to as cash or cheque advance. It is a short-term loan that is available to those who don’t qualify for other types of traditional loans. Besides your credit record, your monthly paycheque is a critical determinant of how much you qualify for. The benefit of a payday loan is that it does not ask for collateral. As long as you settle the loan on the agreed date, this is a quick solution for kitchen remodelling.

A payday loan makes a lot of sense if you are looking to do minor kitchen repairs. As long as you can settle it on the day it falls due, besides a credit card, a payday loan is your quickest option for sourcing funds with minimum questions asked.

Personal loan

Just like a credit card and payday loan, a personal loan is ideal for accessing small amounts to fix a couple of things in your kitchen. It may not help if the anticipated renovations are extensive, however. The benefit of a personal loan is that it attracts minimal costs. Compared to refinance or HELOC loans, its repayment period is shorter, up to seven years. However, a personal loan attracts a higher interest rate.

Do the math before tearing the walls of your kitchen to start renovations. First, you shouldn’t do it yourself if you are not an expert. Second, add numbers up to understand how much the remodelling will cost. If you have some reserve cash stashed in a secret account, raid it! However, if the renovations are extensive, you have other financing options to fall back on.

log in

reset password

Back to
log in