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Real Estate & Your Financial Health *Week 3: Renovation or Relocation? Making the Right Move for Your Future

General Derek Cole 19 Jul

Introduction:
Homeowners often reach a point where their current space no longer suits their needs. Whether it’s a growing family, aging property, or simply a desire for something new, the big question becomes: Should you renovate or relocate? In today’s high-rate environment, making the right decision could have a major impact on your financial health.

The Case for Renovating:

Renovations can help you tailor your home to your evolving needs while potentially boosting its value.

Why Renovate?

  • You love your neighbourhood, school district, or commute.

  • You’ve built significant equity and want to reinvest in your current property.

  • Renovation financing may be easier than qualifying for a new mortgage at today’s rates.

Financial Considerations:

  • A refinance can provide access to equity for renovation funds.

  • Many lenders offer purchase plus improvements or refinance plus improvements options.

  • Renovations typically do not incur land transfer tax or realtor fees.

The Case for Relocating:

Sometimes starting fresh makes more sense—especially if your current home can’t be modified to suit your needs.

Why Relocate?

  • Renovation costs exceed the value they’ll add.

  • You need more space or a completely different layout.

  • You’re downsizing or changing lifestyle.

Financial Considerations:

  • You may be able to port your mortgage if rates and terms make sense.

  • Consider moving costs, legal fees, land transfer tax, and the higher rates associated with new mortgage debt today.

What to Watch:

  • Interest Rate Risk: Today’s average refinance rate is around 4.40% uninsured (as of time of publishing), meaning your new payments may be higher—even if you downsize.

  • Appraisal & Equity: Renovation lending is usually based on as-is and as-improved value. Ensure your plans align with what an appraiser will support.

  • ROI on Renovations: Kitchens and bathrooms typically yield the highest return, while pools or luxury upgrades may not recoup their cost.

Final Thoughts:

Every homeowner’s situation is unique. A refinance for renovations could be the smarter move for some—while others might benefit from a strategic relocation. Understanding both options helps you make the right financial call, not just the emotional one.