Home Renovation Financing in 2026: Should I Renovate or Move?

Homeowners in 2026 face a unique housing market. After years of high inflation and rising construction costs, experts now expect interest rates to ease but stay elevated – Fannie Mae projects 30‑year mortgage rates around 6.5% by end of 2025 and ~6.3% in 2026. Home prices and wages are rising roughly in line with inflation (about 2–3% annually). However, NAHB reports that affordability is strained: tight inventory and elevated mortgage rates are keeping housing costs at multi‑decade highs. In this climate, many homeowners are choosing to renovate instead of moving. Renovations add comfort and space without the premium prices or competition of buying a new home, and they can raise property values over time. In fact, NAHB notes that “in the midst of the current housing affordability crisis, remodeling is capturing a growing share of the residential construction market”.

Financing vs Paying Cash: Why Loans Often Make Sense

Renovations can be expensive, and sticker shock is real. But paying cash or liquidating investments isn’t always the smartest move. There are big financial advantages to financing a remodel instead of an upfront cash purchase:

• Lower effective cost than selling investments: Home equity loans typically carry mid- to high-single-digit interest rates, which can be lower than the opportunity cost of selling stocks or other assets (especially after taxes).
  
  
• Avoid capital gains taxes: Cashing out investments can trigger significant federal and state capital gains taxes. Financing gives you the needed capital without realizing those gains, keeping more of your net worth working for you.
  
  
• Preserve diversification: Financing helps maintain your investment portfolio and long-term wealth strategy rather than concentrating your net worth in your home.
  
  
• Align repayment with value creation: Renovations add home value over time. A loan lets you repay gradually as your home appreciates, instead of a large one-time cash outlay.
  
  
• Maintain liquidity and flexibility: Many renovation loans (like those through RenoFi) allow draw schedules that match construction phases. You only borrow and pay interest as needed, preserving cash for other priorities.
  
  

In short, financing lets you unlock cashflow benefits of home equity rather than draining savings. As Realm’s advisors explain: financing “often costs less than selling investments, helps preserve your long-term plan, and gives you flexibility to pay as value is created in the home.”.

Financing Options: Home Equity, HELOC, Personal Loans – and RenoFi

There are several ways to finance renovations in 2026. Traditional options include a home equity line of credit (HELOC) or home equity loan, a cash-out refinance, or even an unsecured personal loan. Each has pros and cons on rate, fees, and draw flexibility. For example, a HELOC typically ties up your first mortgage as collateral and often offers variable rates. Recent market forecasts expect mortgage and construction costs to be higher in 2026 than earlier in the decade, so borrowers are looking closely at rate comparisons and borrowing limits.

RenoFi loans are a newer renovation-specific option gaining attention. RenoFi is a technology-driven renovation loan marketplace (Realm’s preferred financing partner). Rather than lending directly, RenoFi connects homeowners to a network of banks and credit unions with renovation loans tailored to each project. Crucially, RenoFi underwrites based on your home’s after-renovation value (ARV), not just its current value. As one homeowner guide explains, RenoFi lets you “borrow based on your home’s future (post-renovation) value, often allowing you to borrow more than a conventional HELOC — at competitive rates”. This ARV underwriting can significantly raise your borrowing power while often securing rates similar to other home equity products.

HELOC vs. RenoFi: Comparing the Top Renovation Loans

When comparing a HELOC or home equity loan to a RenoFi loan, consider:

• Borrowing power (ARV advantage): A RenoFi loan can underwrite on anticipated home value. In one example, a homeowner with a $1,000,000 home and $550,000 mortgage planning a $300,000 remodel (adding an estimated $200,000 in value) could borrow about $530,000 via RenoFi, whereas a conventional bank loan might only allow ~$250,000. That’s more than double the funds—because RenoFi counts the $200k in new value toward your collateral.
  
  
• Rate shopping: RenoFi’s platform automatically shops across lenders and products to find the best terms for your situation. It’s like Realm’s contractor vetting but for loans — instant comparison shopping tailored to renovations.
  
  
• Loan structure: RenoFi supports fixed- and variable-rate home loans and even unsecured personal loans for smaller projects. Draw schedules can be matched to construction phases, avoiding interest on unused funds.
  
  
• Process and service: Many borrowers find RenoFi’s tech-driven process faster and smoother than going to a big bank. The streamlined application and closing is built around renovation timelines.
  
  

The bottom line: as Realm notes, “unlike traditional lenders, RenoFi looks at your post-renovation home value… [which] often allows homeowners to borrow significantly more at competitive rates”. And because RenoFi can pull multiple bids, most homeowners don’t find meaningfully better rates elsewhere.

Benefits of Financing with RenoFi

RenoFi’s renovation-specific loan platform offers several strategic advantages for homeowners planning big projects:

• After-Renovation Valuation: RenoFi’s underwriting is built on ARV, effectively making your renovation part of the collateral. Lenders see that your home’s value will rise, so they’re willing to finance a larger portion of the total project cost.
  
  
• Fast Marketplace Shopping: The RenoFi platform instantly shops dozens of lenders and loan products. It finds the best loan type, rate, and terms for your project and credit profile.
  
  
• Smooth Process: RenoFi’s digital tools and renovation expertise streamline closing. Borrowers often report a smoother, faster funding experience than with traditional banks.
  
  
• Dedicated to Renovations: As HousingWire notes, “RenoFi is the only end-to-end financing platform purpose-built exclusively for home renovations”. Its “renovation underwriting” tech is even called “a FICO score for the renovation,” quantifying project risk so lenders can confidently issue ARV loans.
  
  
• Competitive Rates: By pooling credit unions and banks, RenoFi usually delivers “best-in-market” rates for renovation loans. For most homeowners, it’s hard to beat these deals without a unique banking relationship.
  
  

An example scenario highlights the power of ARV underwriting: a homeowner planning a kitchen and addition on a $1M home with $550k mortgage can tap $530k through RenoFi. A conventional lender, ignoring the future value, might only lend ~$250k for the same project. That difference can turn an underfunded remodel into a fully financed dream renovation.

Realm + RenoFi: A One-Stop Renovation Solution

Realm’s new partnership with RenoFi makes managing your renovation simple. Realm advisors handle design, scope, contractor vetting and project management – and now financing is integrated. As Realm’s announcement explains, “planning and paying for your dream project can now happen in one place”. This means you don’t have to juggle bank visits or dip into savings; Realm can help you apply through RenoFi’s platform right alongside finalizing your renovation plan.

With Realm and RenoFi together, the entire process is supported: Realm’s experts ensure your scope and budget align, recommend trusted local contractors, and now secure financing. You still get Realm’s “creative ideas and vetted contractors” plus RenoFi’s loan expertise under one roof. In practice, this means clear budgets from day one and financing matched to those budgets. As Realm advises, they won’t send contractors until “the homeowner has funds available to execute that scope”. That upfront planning—knowing the loan is approved and the budget is covered—reduces risk of delays or surprises.

Case Study: Financing a Major Remodel

Example: Jessica and Ahmed own a $750,000 home with a $300,000 mortgage. They dream of a 400 sq.ft. kitchen addition costing $150,000 and another $50,000 on upgrades. After planning with Realm, they see the renovation will add about $100,000 in value. Through RenoFi, their lender underwrites with ARV. Rather than just financing 80% of today’s value ($750k), the loan considers the home will be worth $850k after. This lets them borrow roughly $200,000 total for the project – enough to cover the $200k cost. The loan rate is competitive (let’s say ~7%), so their monthly payment is far less than the full project cost if paid in cash. In contrast, a traditional HELOC on the $750k home (with $300k existing mortgage) might only allow ~$90k of new borrowing. By using RenoFi, Jessica and Ahmed preserve their savings, avoid selling investments, and move ahead with confidence knowing the financing is locked in.

Realm uses tools like RenoFi’s calculators to show homeowners these scenarios. In one advisory script, Realm notes “For most homeowners, financing ends up being the smartest option… it gives you flexibility to pay as value is created”. And because RenoFi “shops the market for you”, borrowers can feel they’ve got the best terms for their unique project.

Should I Renovate or Move?

Many homeowners ask: “Should I renovate my current home or sell and buy another?” The answer depends on goals and market conditions. In today’s 2026 market, moving can be far more expensive and stressful due to low inventory and competitive buyers. NAHB observes that housing supply is still tight and home prices keep climbing. Upgrading your existing home with RenoFi financing can be a smarter financial move:

• Cost comparison: Selling and buying often incurs high transaction costs, moving expenses, and potentially a bigger mortgage on a pricier home. Renovating costs avoid those and may offer better ROI in a hot market.
  
  
• Tailored improvements: Renovations let you get exactly what you want (layout, features) without compromise. You increase your home’s value on your own terms.
  
  
• Emotional factors: If you love your neighborhood or community, improving your current home can provide the space and comfort you want without the upheaval of moving.
  
  

That said, if you truly need more space or a different location, moving might be right. Realm’s advisors can help analyze the numbers. But with housing affordability low and remodeling booming, many are finding it worth staying put and upgrading. In short, consider: Can renovation give you the key features you need while keeping your current home? Financing through RenoFi often makes that option more accessible.

Getting Started with Your Renovation

Starting a big renovation in 2026 means aligning scope, budget, and financing from day one. Realm requires proof of funds before site visits for good reason: it avoids “falling in love” with designs that don’t fit the budget. Realm’s process will help you explore financing options early. If you’re not ready, your advisor will assist until you are financially prepared.

With Realm and RenoFi together, you can lock in financing quickly and move ahead with builders confident the budget is secure. A short call with RenoFi can reveal your borrowing power and rates. Then Realm can match you with the right contractor and finalize the scope knowing your loan covers it.

Next Steps

• Learn your financing power: Use RenoFi’s borrowing capacity calculator or speak to a RenoFi advisor to see how much you could borrow based on ARV.
  
  
• Explore renovation scenarios: Work with a Realm advisor to outline your project scope and budget. They’ll help you get pre-approved through RenoFi if needed.
  
  
• Compare vs. moving: Realm can run the numbers on selling vs. renovating so you can decide what makes sense for your goals.
  
  

By financing wisely instead of draining savings, you preserve liquidity, avoid taxes on assets, and align payments with added home value. With RenoFi’s ARV loans and Realm’s one-stop management, you can renovate boldly, turning that sticker shock into a smart investment. Your dream renovation is within reach when you combine Realm’s expert guidance with RenoFi’s financing tools.