Home Renovation Financing in Canada: Your Options

How you pay for a renovation affects more than the monthly payment. It decides how much flexibility you have when the project changes, what happens if rates move, and whether your home is on the line. This guide compares the main options open to Canadian homeowners and notes the federal programs that have closed.

What are the main ways to finance a home renovation in Canada?

The main options are savings, a home equity line of credit, refinancing or a home equity loan, a second mortgage, a personal loan or line of credit, and for new suites, CMHC-insured refinancing. Borrowing against your home usually costs less than unsecured credit, but it puts the home up as security. The table compares them.

Limits from the Financial Consumer Agency of Canada and the Department of Finance, checked October 13, 2026. Lenders set their own approval criteria.

How does a HELOC work for a renovation?

A HELOC lets you borrow against your home's equity as you need it, up to a credit limit, and you pay interest only on what you've drawn. That suits a renovation paid in stages. The limit is up to 65% of your home's value, you need more than 35% equity for a stand-alone HELOC, and rates are usually variable.

The Financial Consumer Agency of Canada is plain about the risks: rising rates make repayment harder, interest-only payments don't reduce the principal, and easy access can lead to borrowing more than you planned. If you use a HELOC, set a repayment plan for the renovation balance rather than leaving it open-ended.

Should you refinance your mortgage to pay for a renovation?

It can suit a large project: borrowing secured by your home usually costs less than unsecured credit, and repayment is spread out. The cost is in breaking your current mortgage: a closed mortgage usually carries a prepayment penalty that can cost thousands of dollars, plus appraisal and discharge fees. Ask your lender for the exact figure first.

If you're close to renewal, timing the renovation around it may avoid the penalty. Some lenders also offer a blend-and-extend, where your old rate is blended with a new term's rate; it generally avoids the prepayment penalty, though administrative fees may apply.

How does CMHC's secondary suite refinance work?

Since January 2025, approved lenders can offer CMHC-insured refinancing to homeowners building a secondary suite, such as a basement suite or laneway home. You can borrow up to 90% of the home's value, including the value the suite adds, with up to a 30-year amortization, as long as the as-improved value is under $2 million.

• The property can have up to four units in total, including the existing one.
• You, or a close relative, must live in one of the current units.
• The suite must be self-contained, meet local bylaws and regulations, and not be used as a short-term rental, which CMHC defines as renting for any period under 90 consecutive days.
• The extra money must go to building the suite and can't exceed the project's cost.

Because the lender needs to see what you're building and what it costs, a detailed written quote and a building permit come early. Before you design a suite in Winnipeg, read our guide to secondary suite rules in Winnipeg, and see how we plan basement development.

Which renovation financing programs are closed?

The Canada Greener Homes Loan is closed because its funding is fully committed, and the Canada Greener Homes Grant is closed too. The Canada Secondary Suite Loan Program, announced in 2024, won't happen: Budget 2025 says the program, which was not yet operational, will not be implemented. Treat any site still advertising these as out of date.

What other help can lower the cost?

Federal tax credits can offset part of the cost of building a secondary unit for a senior or an adult eligible for the disability tax credit, or of accessibility work, and some provinces and utilities offer energy-efficiency rebates. In Manitoba, Manitoba Hydro's Home Energy Efficiency Loan finances qualifying upgrades on your energy bill, with approval needed before work starts.

Our guide to renovation grants and tax credits in Manitoba lists each program's current status, with links to the official pages.

How do you match financing to a contractor's payment schedule?

Line up financing before you sign, so the deposit and each stage payment are covered when they fall due. Get the contractor's written payment schedule, share it with your lender, and confirm how funds are released. A HELOC or savings handles staged payments easily; a lump-sum loan works if the money is in place before work starts.

In Manitoba, the Builders' Liens Act requires the person paying to hold back 7.5% of each payment for at least 60 days after substantial performance is certified or the work is completed or abandoned, whichever comes first, so part of the money is released later rather than all at once. Our free written quote sets out the scope and the taxes, which is the document to take to your lender. Winnipeg price ranges are in our renovation cost guide.

Next step

Before you talk to a lender, get a number you can rely on. Book a free on-site visit for a free written quote, or start with our instant renovation estimate for a quick ballpark.