Secured Renovation Loan
for GTA renovations.
A secured renovation loan is a fixed-rate, fixed-term loan secured against your home — like a HELOC but without the floating rate or revolving structure. It's the right path for homeowners who don't qualify for a HELOC (not enough equity, or recently broke their mortgage), but who still want a sub-credit-card rate.
- Typical rate
- 6% to 10%
- Setup time
- 1-2 weeks
- Min. credit score
- 640+
- Best for
- Medium renos ($15K-$60K) without HELOC access
How it works
The lender registers a second charge against your home as security and gives you the loan as a lump sum. You repay it on a fixed monthly schedule, typically 3-7 years, at a fixed rate. No revolving structure, no floating Prime — just a clean amortizing loan.
The interest rate is higher than a HELOC (6-10% vs. 7-9%) because there's less flexibility for the lender, but it's much lower than unsecured options like personal loans (9-14%) or credit cards (19.99%). For homeowners who got priced out of HELOCs by tight qualification rules, this is usually the next-best move.
Where it fits
We see secured renovation loans used most often for: - Bathroom renos in the $20K-$40K range where a credit card balance would compound out of control - Mid-priced kitchen refreshes ($25K-$50K) when the homeowner has equity but their bank's HELOC product doesn't fit - Deck and fence projects ($15K-$30K) where the homeowner wants fixed monthly cost certainty
For projects under $15K, an unsecured personal loan or 0% promotional contractor financing usually wins because you avoid the lender registration fees on title.
What it costs to set up
Most secured renovation loans charge an origination fee of 1-2% of the loan amount (so $300-$600 on a $30K loan) plus a small legal cost for registering the charge ($400-$700). Closing usually happens within 1-2 weeks of approval — faster than a HELOC and significantly faster than a refinance.
Some lenders waive the legal fee for loans through a renovation-specific channel — Manulife One, Tangerine, and a handful of credit unions are worth asking about if cost-to-set-up matters.
Where it falls short
The fixed amortization means you pay a defined monthly amount whether the renovation is on schedule or not. You can't pause payments during construction the way a HELOC's interest-only structure lets you.
Early payoff is also typically penalized — 1-3 months of interest, depending on the lender. If you expect to pay it off in under 18 months, run the math against a 0% contractor financing offer first.
When to use it instead of HELOC or refi
Use a secured renovation loan when: - You don't have enough equity for a HELOC (typically under 20% net) - Your existing mortgage rate is too good to break in a refi - You want a fixed payment for budgeting clarity - You need the money in 1-2 weeks, not 3-6 weeks
Skip it when: - A HELOC is available — rate spread is too big to ignore - The project is under $15K — closing costs eat the rate advantage - You expect to pay off in under 18 months — go promotional contractor financing instead
This option pairs well with bathroom, tile, and flooring projects in the $15K-$60K bracket.
Worked example
What it actually costs.
Bathroom + tile renovation on an Etobicoke bungalow with limited equity.
- Amount borrowed
- $32,000
- Rate
- 7.49% fixed
- Term
- 5 years
- Monthly payment
- $641/month
- Total interest cost
- Roughly $6,460 in interest over the 5-year term
How to qualify.
- Credit score 640+ (some lenders 620+ at higher rates)
- Some home equity — typically 10%+ rather than the 20%+ HELOC requires
- Verifiable income — 2 years of T4s or NOA
- Existing mortgage in good standing (no missed payments in last 12 months)
- Property is owner-occupied or owner-financed second home
Why it works
- Fixed rate + fixed payment — no surprises
- Faster setup than HELOC or refi (1-2 weeks)
- Lower equity requirement than HELOC
- Available even if existing mortgage is mid-term
- Doesn't disturb your existing mortgage rate
Where it falls short
- Higher rate than HELOC (typically 2-4 points)
- Fixed amortization — no interest-only flexibility
- Origination fee + legal cost ($700-$1,300 typical)
- Prepayment penalty if paid off early
- Less competitive than HELOC for amounts over $60K
See your project's price range — before you call.
Three questions, real numbers from 200+ Toronto-area projects. We'll email the range and a brief on what drives it up or down.
Step 1 of 3
What kind of project?
Frequently asked
About secured reno loan financing.
- Is a secured renovation loan the same as a second mortgage?
- Technically yes — both are loans secured by a second charge against your home. The difference is positioning. 'Renovation loan' products are marketed by prime lenders with simpler underwriting and lower fees. 'Second mortgages' from private lenders are higher rate (10-15%) and target borrowers who don't qualify for prime products.
- Can I get one if I have a self-employed income?
- Yes, but expect more documentation. Lenders want 2 years of T1 General returns plus business financial statements. If your stated income is high but your declared income is lower, B-lender products are usually the better fit at slightly higher rates (8-11%).
- Will it affect my mortgage when it's time to renew?
- Slightly. The second charge appears on title, so at renewal your primary lender will see it and factor the monthly payment into your debt service ratios. As long as you've been paying both on time, this is mostly cosmetic.
- Can I pay it off early?
- Yes, but most products charge 1-3 months of interest as a prepayment penalty. If you expect to pay off in 12-18 months, run the numbers against a Financeit 0% 12-month promotional plan before committing to a secured loan.
Pairs well with
Projects this financing fits.
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