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HuntleyConstruction

Resources · Financing

How to pay
for a renovation.

A plain-English guide to financing a renovation, custom home, or suite build in Chilliwack and the Fraser Valley. Written by a contractor, not a lender.

We are not a lender and we do not offer in-house financing. But we watch clients navigate renovation financing every week, and a few hours of research before the first contractor conversation saves most homeowners real money.

Here are the five options that cover almost every renovation in BC, what they are, when they fit, and the tradeoffs to ask your mortgage broker or banker about before you commit.

Start with your lender, not your contractor. Knowing how much you can realistically finance changes the scope conversation. Most homeowners who end up disappointed did not get their numbers straight before they asked for quotes.

The five options

What fits what.

Option 01

Home equity line of credit (HELOC)

Best for: Most flexible renovation financing option for homeowners with equity.

A HELOC is a revolving credit line secured against your home's equity. You draw from it as the project progresses, and only pay interest on what you've drawn.

Pros

  • Interest-only payments during the draw period
  • Pay back and re-borrow as needed
  • Typically lower interest rate than personal loans
  • Interest-only during construction protects cash flow

Tradeoffs

  • Variable rate, your payment moves with prime
  • Your home is the collateral
  • Requires enough equity (typically 20 percent or more)

Option 02

Cash-out refinance

Best for: Larger projects (whole-home renovations, custom builds) where you want a fixed rate.

You break or renew your existing mortgage and pull equity out as a lump sum, adding the renovation cost to your new mortgage balance.

Pros

  • Fixed rate for predictability
  • Consolidates renovation cost into one payment
  • Typically the lowest rate of any renovation financing option

Tradeoffs

  • Breaking your existing mortgage may trigger a prepayment penalty
  • Closing costs — legal, appraisal, registration
  • Resets your amortization clock

Option 03

Purchase-plus-improvements mortgage

Best for: Buying a home that needs work. Rolls the renovation into the purchase mortgage.

Your lender approves a mortgage based on the home's post-renovation value. Funds are held in trust and released to Huntley once work is completed and verified.

Pros

  • Finance the renovation at mortgage rates
  • No second loan or HELOC to manage
  • Available through most major Canadian lenders

Tradeoffs

  • Scope of work must be quoted and approved before closing
  • Funds release only after work is completed and inspected
  • Typically capped at 10 to 20 percent of purchase price

Option 04

Construction mortgage

Best for: Custom home builds and major additions.

A specialized mortgage that releases funds in stages tied to construction milestones. Converts to a conventional mortgage at completion.

Pros

  • Funds match the construction schedule
  • Interest-only during the build phase
  • Designed for ground-up construction

Tradeoffs

  • More paperwork and inspection at each draw
  • Fewer lenders offer them, shop around
  • Typically requires 20 to 25 percent down or equity

Option 05

Unsecured personal loan

Best for: Smaller projects under $50K where speed matters more than rate.

A fixed-term loan that doesn't require home equity. Funds arrive fast.

Pros

  • No collateral required
  • Fast approval and funding
  • Simple fixed payment schedule

Tradeoffs

  • Higher interest rate than home-secured options
  • Shorter terms (typically 3 to 7 years)
  • Loan limits often below $50K

How Huntley bills

Progress payments, not lump sums.

Huntley invoices on a progress-payment schedule tied to milestones in your contract, typically a deposit at signing, then scheduled draws at demolition, rough-in, drywall, and completion. You pay as work is completed, not up-front for work that has not happened.

This matters for financing because HELOCs, construction mortgages, and purchase-plus-improvements mortgages all release funds the same way. Your lender will ask us for the schedule and any milestone sign-offs before releasing each draw. We are used to that paperwork.

The deposit is always under 15 percent of contract value. We do not ask for large up-front payments. If a contractor wants 30 to 50 percent of the project price before work begins, that is a red flag, regardless of how they explain it.

Our take

What we would tell a friend asking.

Talk to an independent mortgage broker, not just your existing bank. Brokers shop your file across lenders and often find a 0.25 to 0.5 percent lower rate, which on a $200K renovation financing is real money over the life of the loan.

For renovations under $100K with existing equity, a HELOC is usually the cleanest path. For custom builds or additions over $150K, a construction mortgage beats pulling from a HELOC because the staged draws match the build.

Get your financing pre-approved before we do your quote. It takes the pressure off the scope conversation and makes the go or no-go decision faster.

“We cannot recommend a specific broker or lender because it would compromise our independence. But if you ask us at the site visit, we will tell you which brokers our past clients have had good experiences with.”

Ready to plan

Got your financing sorted?

Once you know your number, we will walk the project and quote it line-item. No pressure, no upsell, and no surprise invoices once we start.

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