How much does a home renovation loan cost? Rates, fees and what to budget
By Tora Mari Editorial Team · Updated October 2026 · 6 min read
In short
A renovation loan's cost is its interest plus fees over the whole term, on top of the project. Budget a buffer, borrow only the gap, and compare total cost.
Two costs, not one
There is the cost of the project, and there is the cost of borrowing for it. The second is interest plus any fees, added up across the whole term. A longer term lowers the monthly payment and raises the total.
What shapes the price of the loan
- Your credit profile, which affects the rate you are offered.
- The term. Longer terms usually mean more total interest.
- Fees. Many lenders take an origination fee out of the loan, so you receive less than you borrow.
- Secured or unsecured. Loans backed by your home may cost less but put the home at risk.
Budget for the overrun
Project costs often rise once work starts. Many planners suggest adding 10% to 20% to the best written quote. Decide what you can pay in cash, then size any loan to the remaining gap.
How to compare offers
- Get written quotes from several contractors.
- Check your rate with a few lenders using soft-check tools.
- Compare APR with fees included, the term and the total you will repay.
- Check the payment still fits your budget if the project lands at the top of your buffer.