Renovation Loan Payment Calculator & Financing Options

How to use this calculator

This is a payment calculator, not a cost estimate. Start from the total you expect to pay the contractor — the cost calculators on this site give a sourced range for most projects — and add a contingency.

• Project cost. The full price of the job, including permits and the contingency.
• Cash you put in. Savings you will spend on the project. The calculator borrows the rest. Zero is fine.
• Loan type.
  • Home equity loan — a lump sum at a fixed rate, repaid in equal monthly payments. Choose a term of 5 to 30 years.
  • HELOC — a line of credit secured by the home. The calculator assumes you pay interest only during the draw period and then repay the balance in equal payments over the repayment period.
  • Personal loan — unsecured, shorter terms (1 to 7 years here), usually a higher rate.
• Interest rate (APR). Use the APR from a real quote. The default for home equity loans and HELOCs is 8.00%, an example rate: we could not read a dated national average for those products from Bankrate, Freddie Mac or NerdWallet when this page was updated, so the field is not pretending to be one. For personal loans the default is 12.36%, Bankrate's average for a 700 FICO borrower on a $5,000, three-year loan (rate data as of October 21, 2026).
• Term, or draw and repayment periods. For a HELOC, enter both. NerdWallet says the draw period is usually 10 years and repayment usually lasts up to 20; the CFPB says repayment is often over 10 or 20 years.
• Home value and mortgage balance (optional). Enter both to run the combined loan-to-value check. Use a recent appraisal or a realistic sale price, and the balance from your last mortgage statement.

Renovation loan payments in 2026

The table runs the same $40,000 — a $50,000 project with $10,000 of your own cash — through each option.

Personal loan rate: Bankrate, What is the average personal loan rate for October 2026?, published October 28, 2026 (700 FICO, $5,000, three-year term). The 8.00% rate is an example, not a market average.

For context on where home-secured rates sit: NerdWallet listed the prime rate, which HELOC rates are based on, at 7.00% on October 29, 2026, and Freddie Mac's Primary Mortgage Market Survey put the 30-year fixed mortgage at 7.32% for the week of October 22, 2026. Your quote will depend on your credit, your equity and the lender's margin.

The formula

For a home equity loan, a personal loan and the repayment period of a HELOC:

Payment = P × r ÷ (1 − (1 + r)^−n)

where P is the amount borrowed, r is the APR divided by 12, and n is the number of monthly payments. During a HELOC's interest-only draw, the payment is simply P × r. Total interest is everything you pay minus P.

A check you can repeat by hand: $10,000 at 12% for 12 months gives r = 0.01 and (1.01)^12 = 1.126825, so the payment is 100 ÷ (1 − 1 ÷ 1.126825) = $888.49. Bankrate's published example — a 20-year, $70,000 home equity loan at 9.1% — comes to $634.32 a month, and so does this calculator.

What drives the payment

1. The rate. On $40,000 over 15 years, moving from 8.00% to 9.00% raises the payment from $382.26 to $405.71 and the total interest from $28,806.95 to $33,027.19.
2. The term. A longer term lowers the payment but raises the interest: 10 years at 8.00% costs $18,237 of interest, 20 years costs $40,298.
3. How much you borrow. Every dollar of cash you put in is a dollar you do not pay interest on. Trimming the scope is often worth more than shopping a quarter point off the rate.
4. Interest-only years. A HELOC's draw period keeps early payments low, but none of that money reduces the balance. In the table, 10 interest-only years plus 20 years of repayment cost more than twice the interest of a 15-year home equity loan at the same rate.
5. Variable rates. The CFPB notes HELOCs usually have a variable rate, so payments may change month to month. The calculator holds the rate steady, so treat the HELOC figures as a planning example.

Payment breakdown

The result card shows:

• Monthly payment — or, for a HELOC, the interest-only draw payment and the later repayment payment, plus the jump between them.
• Amount borrowed — project cost minus your cash.
• Total interest and total paid — over the full term, assuming every payment is made on time and nothing is prepaid.
• Combined loan-to-value — when you enter a home value, for home-secured loans only.

Not included: closing costs, appraisal fees, annual HELOC fees, origination fees on personal loans, and any rate discount for autopay. Ask each lender for these in writing; they belong in the comparison alongside the APR.

Ways to pay for a renovation, compared

The calculator handles the three loans most owners weigh for a single project. They are not the only options. The table below compares eight ways to pay. The rate column describes how rates compare rather than quoting numbers, because rates move every week and your quote depends on your credit and equity.

The CFPB describes a home equity loan as borrowing all the money up front and repaying it in regular monthly payments, usually at a fixed rate, and a second mortgage as any loan secured by your house while another loan is still secured by it. It notes that a personal line of credit lets you borrow based on your credit instead of your home, but limits may be lower and rates higher than on options that use the home as collateral, and that regular credit card rates are typically higher too. That is the core trade-off on this page: the house as security buys a lower rate, and puts the house at risk if you cannot pay.

Cash

Paying cash costs nothing in interest or fees, and it is the only option with no approval step. It also does not have to be all or nothing. In the calculator, the $10,000 of cash in the default example cuts the borrowed amount from $50,000 to $40,000; at 8.00% over 15 years that lowers the payment from $477.83 to $382.26 a month and saves $7,201.74 of interest.

The limit is what is left afterward. Money spent on the project is not available for the surprises renovation tends to bring, so keep a contingency on top of the quote, and do not drain the savings you would need for a job loss or a failed furnace.

Personal loans

A personal loan is unsecured, so the house is not at stake and there is no loan-to-value check. The rate depends heavily on your credit: Bankrate's average was 12.36% for a 700 FICO borrower (rate data as of October 21, 2026), well above the 7.00% prime rate that HELOC rates are based on. Terms are short — the calculator allows 1 to 7 years — so payments are higher. On $40,000, five years at 12.36% is $897.07 a month, more than twice the $382.26 of a 15-year home equity loan at the example rate.

A personal loan makes most sense for a smaller job, when you have little equity, or when you do not want a lien on the house. Ask about origination fees and compare them along with the APR.

Credit cards and "no interest" offers

The CFPB says regular credit card rates are typically higher than for options that use your home as collateral, though some promotions offer a lower rate for a set number of months. Read the promotion wording carefully, because there are two kinds:

• "0% intro APR for 12 months." No interest builds during the promotion. Whatever balance is left starts accruing interest only when the promotion ends.
• "No interest if paid in full in 12 months." This is deferred interest. If you leave any of the promotional balance unpaid, interest going back to the date of purchase is added. In the CFPB's example, $100 left on a $400 purchase becomes $165 owed.

Check any financing a store or contractor offers for the same wording. If you use a deferred-interest plan, divide the balance by the number of promotional months and pay at least that much every month. A card works for materials and fixtures you can pay off quickly; it is a poor way to carry a large balance.

Renovation mortgages: FHA 203(k) and Fannie Mae HomeStyle

Both put the cost of the work into a first mortgage when you buy or refinance, so the renovation is financed at a mortgage rate and repaid over the mortgage term instead of through a second loan. They are worth comparing if you are buying a home that needs work, or if you would refinance anyway.

Fannie Mae HomeStyle Renovation. Fannie Mae's Selling Guide (sections dated December 10, 2025) sets these rules:

The as-completed value is the appraised value of the home with the planned work done, so the loan is sized on the finished house. On a refinance of a home appraised at $400,000 as completed, renovation costs can be up to $300,000 — but the whole loan must also fit the loan-to-value limits in Fannie Mae's Eligibility Matrix, so the amount you can actually borrow may be lower.

FHA 203(k). HUD's 203(k) program insures a mortgage that adds the cost of repairs to the purchase or refinance of a home. HUD sets its dollar limits, the consultant requirement and which work qualifies. This page does not quote those limits; check HUD's 203(k) program page or ask an FHA-approved lender for the current rules before you plan around one.

Expect more paperwork than with a home equity loan. For HomeStyle, the Selling Guide has separate rules for the renovation contract, renovation costs and escrow accounts, and a completion certification once the work is done.

HELOC or home equity loan for a renovation

A home equity loan gives you the whole amount at closing, at a fixed rate, with a payment that never changes. That fits a project with a firm fixed-price contract.

A HELOC lets you draw as the work progresses and pay interest only on what you have drawn, which fits a project paid in stages or one with an uncertain scope. The CFPB's cautions are the price of that flexibility: the rate is usually variable, monthly payments are often significantly higher once the repayment period starts, and some HELOCs can be converted in part to a fixed rate, usually a higher one. The CFPB adds that some plans require minimum draws or a minimum balance, and that a lender can reduce or freeze the line if your home's value drops or your finances change — worth knowing if you plan to draw for the last phase months after closing. The full comparison is in our guide to HELOC vs home equity loan for renovations.

Both are secured by your home. The CFPB is blunt about it: if you fall behind or cannot repay, you could lose your home. A personal loan does not put the house at risk, which is part of why it costs more.

How much equity you can borrow

Lenders look at combined loan-to-value: everything secured by the home divided by its value. Bankrate says lenders generally want it no higher than 80% to 85%. Its worked example: a $400,000 home × 0.8 = $320,000; minus a $250,000 mortgage leaves about $70,000. If the appraisal comes in at $370,000 instead, the room drops to about $46,000.

Enter your home value and mortgage balance and the calculator shows your combined loan-to-value with this loan, and the most a lender capping at 80% or 85% would lend. If the project needs more than that, the options are more cash, a smaller first phase, or a lender with a higher limit — Bankrate notes some lenders may go higher.

Is the interest tax-deductible?

IRS Publication 936 (2025) sets the rule. Home mortgage interest is interest on a loan secured by your main or second home, and interest on a home equity loan or line of credit is deductible only if the borrowed funds are used to buy, build or substantially improve the home that secures the loan. An improvement is substantial if it adds to the home's value, prolongs its useful life or adapts it to new uses; repairs that keep the home in good condition, such as repainting, do not count. You also have to itemize on Schedule A, and the deduction applies to the first $750,000 of mortgage debt ($375,000 if married filing separately).

So a HELOC that pays for a home addition or a garage conversion can qualify; the same HELOC used for a car or a vacation cannot. A personal loan is not secured by the home, so it does not fall under this rule. Keep the contractor invoices with your tax records.

What about a cash-out refinance?

A cash-out refinance replaces your whole mortgage with a bigger one and hands you the difference. It is not in the calculator because its true cost depends on the mortgage you give up, not just the cash you take out.

An example of why: with a $250,000 balance and $40,000 of cash, the new loan is $290,000. At 7.32% over 30 years — Freddie Mac's survey average for the week of October 22, 2026; actual cash-out quotes can differ — the payment is $1,992.10 and the interest over 30 years is about $427,000, most of it on the $250,000 you already owed. If your current mortgage rate is well below today's rates, refinancing all of it to borrow $40,000 can cost far more than a home equity loan or HELOC on the $40,000 alone. It can make sense when your current rate is at or above today's rate. The CFPB's advice points the same way: carefully consider the new rate, especially if it is higher than the rate on your current mortgage, and expect to pay closing costs.

Which option fits your project

• A fixed-price contract and enough equity: a home equity loan. One amount, one rate, one payment.
• Work paid in stages, or a scope that may grow: a HELOC, as long as you can handle a variable rate and the payment jump when repayment starts.
• A smaller job, little equity, or no wish to borrow against the house: a personal loan, at a higher rate and a shorter term.
• Buying a home that needs work, or refinancing anyway: a renovation mortgage. Ask lenders for HomeStyle and FHA 203(k) quotes and compare the full cost, not just the rate.
• A current mortgage rate at or above today's rates: price a cash-out refinance against a home equity loan on the same amount.
• A few thousand dollars of materials you can clear within a promotion: a card with a true 0% intro APR, not a deferred-interest plan.
• Savings that cover the job with a reserve left over: cash, or cash for part of it and a smaller loan for the rest.

Before you borrow for a project, compare what it costs with what it adds. In the 2025 Cost vs. Value Report, only five of 28 projects recouped more than their cost at resale nationally, led by garage door replacement at 267.7%. Work you will use for years can still be worth financing, but if you are borrowing on the expectation of getting the money back when you sell, check that expectation first. Our guide to the best renovations before selling covers which projects come closest.

Sources

• IRS, Publication 936 (2025), Home Mortgage Interest Deduction — home equity interest deductible only when used to buy, build or substantially improve the home securing the loan; definition of substantial improvement; Schedule A; $750,000 / $375,000 limit. link
• Bankrate, How Much Home Equity Can You Really Borrow? — lenders generally want LTV no more than 80–85%; $400,000 / $250,000 worked example; 20-year $70,000 loan at 9.1% = $634.32 a month (July 17, 2025). link
• Bankrate, What is the average personal loan rate for October 2026? — 12.36% for a 700 FICO, $5,000, three-year loan, rate data as of October 21, 2026 (published October 28, 2026). link
• Consumer Financial Protection Bureau, What is a home equity line of credit (HELOC)? — draw period, repayment period, variable rates, minimum draws, line reduced or frozen if the home's value drops, risk to the home (last reviewed August 28, 2026). link
• Consumer Financial Protection Bureau, What is a home equity loan? — money borrowed up front against your equity, usually a fixed rate, upfront fees and costs, risk to the home (last reviewed September 11, 2024). link
• Consumer Financial Protection Bureau, What is a second mortgage loan or "junior-lien"? — definition of a second mortgage (last reviewed September 11, 2024). link
• Consumer Financial Protection Bureau, What other types of loans are similar to a HELOC? — cash-out refinance rate caution and closing costs; personal lines of credit and credit cards typically carry higher rates than home-secured options (last reviewed June 27, 2024). link
• Consumer Financial Protection Bureau, How to understand special promotional financing offers on credit cards — 0% intro APR vs deferred interest; $400 purchase example, $100 vs $165 owed (June 8, 2017). link
• Fannie Mae, Selling Guide B5-3.2-01, HomeStyle Renovation Mortgages — purchase or refinance with renovation funds; no restrictions on types of renovations; permanently affixed; appliances; 15-month deadline, extension up to 18 months (12/10/2025). link
• Fannie Mae, Selling Guide B5-3.2-02, HomeStyle Renovation Mortgages: Loan and Borrower Eligibility — 75% and 50% renovation cost limits; occupancy types; no cash to the borrower on a refinance; do-it-yourself work up to 10% of as-completed value (12/10/2025). link
• NerdWallet, HELOC Rates — draw period usually 10 years, repayment usually up to 20; prime rate 7.00% (last updated October 29, 2026). link
• Freddie Mac, Primary Mortgage Market Survey — 30-year fixed average 7.32% for the week of October 22, 2026. link
• Zonda, 2025 Cost vs. Value Report — 28 projects; national top ten, of which five recouped more than their cost; garage door replacement 267.7% (September 18, 2025). link

Related

• HELOC vs Home Equity Loan for Renovations
• Best Renovations Before Selling
• Renovation Contingency Budget
• Home Addition Cost Calculator
• Kitchen Remodel Cost Calculator
• Home equity loan