Around one in three Canadians are using home equity lines of credit (HELOCs) to finance their home renovations, according to a study by Altus.
HELOCs allow Canadians to borrow against the equity of their home. While HELOCs are the most popular channel to fund renovations, there are also those who use refinancing (23%), and personal loans and unsecured line of credit (20%).
The Altus study also found that 17% of Canadians use credit cards for their renovation projects, while 6% get a private loan.
Kaitlin Last, contributing editor at Better Dwelling, said renovation spending is expected to rise this year.
"One weight that may support this is rising home values, which have been on a tear recently. This trend tends to provide fuel for consumption through HELOCs and refinancing — both are sources of funds the majority of people plan to tap," she said in an analysis.
However, the underwhelming growth in consumer credit might could dampen the forecast on renovation spending.
"As general economic anxiety surfaces, it becomes more difficult to get people to part with their cash," she said.
Looking for ways to save on your renovation costs? Check out this article.