Refinancing your mortgage can make your renovation project a reality!

You may wonder whether there is a way to use your mortgage to finance a specific project, such as a kitchen renovation. Let’s take a look at how it is not only possible, it is the most cost-efficient way to finance these types of costs.

How does it work?

First of all, you must have the necessary equity in your home to be able to refinance your mortgage and pay for the project. Under today’s federal regulations, you can refinance up to a maximum of 80% of the market value of your home. The difference between what you currently owe on your mortgage and the 80% ceiling is the amount you can withdraw to finance your kitchen upgrade.

Here is an example:

  • Your home is worth $360,000
  • You currently owe $200,000
  • The 80% re-finance limit is $288,000

The amount you could withdraw: $288,000 – $200,000 = $88,000.

In this example you could refinance and access up to $88,000 on the equity of your home. Clearly, if your project – in this case a new kitchen – does not require that much cash, but you are not obliged to withdraw the full amount.

So, if it’s possible to use your mortgage to pay for the renovations, why not take out a personal line of credit or a personal loan instead?

Quite simply, you will pay less interest if you use your mortgage to pay for the renovations. Personal loan interest rates vary between 5% and 8%, while personal credit line interest rates vary between 4.5%-7.5%. However, current mortgage rates are much lower, ranging between 2.59%-3.69%. These differences translate to hundreds if not thousands of dollars in savings for you.

Are there costs associated with refinancing a property?

Yes, but several might be reimbursed by the financial institution, such as:

  • Notary fees associated with the new mortgage (between $800-$1,200).
  • Property evaluation costs: (between $250-$500). However, when you contract a mortgage through Multi-Prets, this cost will be reimbursed.
  • Penalties associated with breaking your mortgage if you do not want to weigh your rate.
  • Location Certificate: If it is not up to date, $900

Therefore, why not refinance your mortgage, build your dream kitchen, and increase the value of your home?

Communicate with our mortgage broker Mélanie Pépin. Since she’s not attached to any specific financial institution, she can help you find the write financing solution to make your renovation project come true.



Maitre Marie-Lou Philie-Noel
Address : 6424 Rue Jean-Talon Est, Montreal, QC H1S 1M8
Phone :(514) 439-2125


plani-coneil-marie-lou-philie-noel-notaireMarie-Lou Philie-Noël