Financing Your Kitchen Renovation with Your Mortgage
Planiprêt
Feb 10, 2025
You could finance the renovation of your dream kitchen through your mortgage. See how this type of financing can be advantageous for you.
How does it work?
First, you need to ensure you have the necessary equity to refinance your loan. In other words, you can finance up to 80% of the value of your home. The difference between this 80% of your home's value and your current mortgage will determine the maximum amount you can obtain for your project.
Here is an example:
- The market value of the property is estimated at $450,000.
- The current mortgage is $200,000.
- The maximum refinancing at 80% is therefore $360,000.
- So, $360,000 – $200,000 = $160,000, which is the maximum amount that can be released.
- Even if the maximum amount that can be withdrawn is $160,000, you are obviously not obliged to use all this available money if you do not need it; you can take only the money necessary for your project.
Why finance through your mortgage rather than with a personal loan or a line of credit?
For a simple and good reason: the cost of interest. For a personal loan, you can expect between 5% and 12% interest, whereas for a mortgage loan, the rate varies between 4.25% and 6.00%*.
What are the costs for refinancing a property?
You must assume certain costs, but they can be reimbursed by the lending institution. Here are the costs to assume:
- Notary fees for the new mortgage can vary between $800 and $2,000.
- Property appraisal fees range between $500 and $800. Planiprêt reimburses these fees.
- Mortgage penalty fees (if your mortgage is due and you do not want to blend your rate).
- Certificate of location (if it is no longer up to date) is about $1,500. (This is not always required and can be replaced by title insurance payable at the notary for about $200-400.)
Why delay the realization of your dream? Negotiate a new mortgage for your kitchen renovation and increase the value of your home!
Contact us for more information about refinancing.
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*Rates as of February 10, 2025
The content of this publication is subject to exclusive copyright in favor of Planiprêt – Mortgage Brokerage Firm, which reserves all rights.
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