Using Home Equity to Pay for a Renovation

Renovation is the most common reason homeowners tap equity, and the one where the money most often comes back — partially.

What actually returns its cost

Exterior work — doors, siding, roofing — consistently recovers the largest share.
Mid-range kitchen and bath updates outperform high-end versions.
Pools, elaborate landscaping, and highly personal layouts recover the least.

Get firm bids, then add a 15% contingency. Renovations almost always find something behind the wall.

For a fixed-scope contract, a home equity loan gives payment certainty. For phased work, a HELOC lets you pay interest only on what you have drawn.

Value has a ceiling set by your neighborhood. Spending your way past the top comparable sale rarely returns anything.

Run your own figures through the calculator. No credit check, nothing saved unless you ask.

Should I wait until the work is done to borrow? +

Some homeowners renovate, get a new appraisal, then borrow against the higher value — but that requires funding the work another way first.

Is renovation interest deductible? +

Interest on funds used to substantially improve the home securing the loan generally qualifies. Confirm with a tax professional.