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So, you’ve decided that this year will be the one where you turn your existing bathroom into that dream home spa. Gone will be the old, chipped bath-shower combo. Instead, you will soon be relaxing in your very own steam shower-whirlpool bathtub combo. Enter modern elements, like wood engineered to withstand moisture, a plant wall to improve indoor air quality, and a heated marble floor. Don’t forget some chromatherapy lights and aromatherapy dispensers for the ultimate bath-steam room.

But, is all that effort and expense worth it? Despite the fact that the bathroom is the smallest room in the home, renovating it can cost as much as renovating a kitchen. Luxury finishes, like granite, can quickly add up in cost. Another potentially huge expense is plumbing. If you’re planning on moving the existing pipes, then you can expect that job to take up a large portion of your budget.

Although spending all of that money on such a small room may seem silly, it’s actually a great idea. Homebuyers look for turnkey homes that have been modernized. Most of us can’t upgrade every single room in our homes, and homebuyers understand that. However, buyers will generally offer more money for a home that has an upgraded kitchen and bathroom. Offer a home bath-steam shower experience and you’ll have buyers beating a path to your door. No matter how much you decide to spend on your bathroom renovation, you will most likely get that money back. Just make sure that your design choices are fresh and modern.

Not sure how to design the best bathroom remodel? If possible, I recommend hiring an interior designer. That person will help steer you toward choices that will satisfy your needs and those of future buyers (if you ever decide to give up your bathroom, that is!). A formal design layout will also help you understand exactly how much your bathroom renovation will cost.

Now that you’ve decided to take the plunge and renovate, you’re going to need to decide how to pay for it. Here are 6 tips on getting the money you need to build your dream bathroom:

Self-funding. If you’ve been saving money for this renovation, you’re well ahead of the game. The more of your own money you can put toward your project, the less you’ll have to borrow.

Personal line of credit. Opening a line of credit might be the best way to access the money you need for your renovation. The amount the bank will allow you to access will depend on the cost of the project and your own personal credit history. Some banks have limits on the amount of money available in a line of credit. If the cost of your renovation exceeds that set amount, you’ll have to look at other financing options. Otherwise, a line of credit is ideal because it allows you to use as much or as little of the available funds as you need. You only pay interest on the amount that you’ve used. A line of credit doesn’t have an expiry date, either. As long as you pay off your balance, you can keep accessing the available funds without having to reapply. That’s a great option for people who foresee completing the renovation over a longer period of time.

Personal loan. A bank can grant you the exact amount of money that you need for the renovation through a loan. You will have anywhere from 1 to 5 years to pay it back. Interest rates on loans are typically less than those for credit lines, but you will have to reapply for any amount you still need after the term of the loan ends.

Refinance your mortgage. If you’ve paid off enough of your original mortgage, it might make sense to add the amount you’ll need for the renovation onto it. This option allows you to spread out repayment over years at an interest rate that is usually lower than any other option. Since repayment is spread out, your regular mortgage installments won’t increase by much. Depending on your bank’s rules, you may be able to borrow up to 80% of your home’s value. Unlike credit lines or using your own savings, the bank will likely charge legal and appraisal fees to refinance your mortgage.

Adding to a new mortgage. The trend in home sales is to immediately gut the home you’ve just purchased before actually moving into it. If you know you’re going to renovate, then you can add the cost of that renovation to your new mortgage. Not only will you get the bathroom of your dreams from day 1, you will also spread the cost of that renovation over 25 years (or whatever term you choose for your mortgage).

Credit cards. If you know that your renovation will not cost you too much, you might consider paying for it with your credit card. I would caution you about this option, though. The best case scenario is if you know you’ll have access to all the funds needed to pay off your credit card bill as soon as it’s due. If you’re forced to pay it off in installments, try to minimize the number of months it will take you to clear your balance. Credit card interest rates can be very high.

Remember to add at least 10% onto the amount of money you think you’ll need for this renovation. You just never know what you’ll find when you start ripping out walls! The best advice I can give you is to interview at least 3 interior designers and at least the same number of contractors. Get lots of estimates and research those professionals before you sign on the dotted line. The more confidence you have in their ability to do a great job, the better you’ll feel about borrowing money for this project.

Enjoy your brand new bathroom!

I hope this post has been helpful and encouraging to those that may have thought a Renovation project was too complex or beyond their ability to manage. My intent is always to inform, educate, and generate discussion. Please call me or email me directly or visit my website for more information on renovation loans. I welcome your comments and questions!

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Join the discussion One Comment

  • These are some great ideas for financing a bathroom remodel. We need to remodel ours, because everything in there is getting really old, outdated, and gross. Financing the mortgage sounds like a great idea, since the interest rate is so low.