Bang for Buck Calculations for Financing a Home Renovation Project

Financing a Home Renovation Project Is More Effective When You Know Where Your Money Will Go. These Bang for Buck Numbers Can Help You Plan Ahead Accurately.

Financing a Home Renovation Project

One of the easiest ways to think about financing a home renovation project is in terms of the average cost for various popular renovations in your region. The most popular renovations will vary depending on where you live, and investing in a new sunroom might be a better renovation than a new master bedroom for your home, but if you can get an idea of how much these projects will cost, you can at least start to put an estimate together in your head so you can evaluate your financing options and decide how much of a home loan refinancing burden you can afford to take on.


The kitchen is one of the most popular areas to renovate in a home because homeowners get some much value from it and it translates very well to increased home value. Before you get into any specifics, the low-end, average cost of a kitchen renovation is around $40,000. But many common, new kitchens cost closer to $55,000 or $60,000. This is the price tag for a major, mid-range kitchen remodel, which generally includes new floors, countertops, cabinetry, appliances, lighting, minor structural work like moving an oven, and maybe a new center island. A bigger or smaller kitchen will obviously influence the price, as will living in a super-urban city or extremely remote location where labor and transportation costs make everything more complicated and expensive.

The appliances represent a big chunk, from $6,000 to $10,000 for a new range stove, oven, energy-efficient fridge, dishwasher, and microwave. Cabinetry and hardware like handles and faucets represent another 30% of most projects, at around $15,00 to $22,000 for an average kitchen, assuming semi-custom cabinets. Design fees and installation are the final large sum reaching around 20% depending on labor costs in your region. Floors, countertops, lighting, walls and ceilings, repainting, and updating doors and windows to match each represent another five-to-ten percent of the bill.


A mid-range bathroom remodel is much less expensive, coming in at just under $16,000 on average, according to Remodeling magazine’s yearly report from 2012. But it can be similarly high-impact because the bathroom is another place people spend a lot of time getting ready for their day and for bed, and because home buyers always look at bathrooms to see if they are nice, neat, efficient, and clean. This cost goes up for master bathrooms because they are bigger than the average bathroom, but not by much.

With a bathroom remodel, the major changes you should consider are new flooring, new tiling and a new tub or new tile flooring for the shower, replacing the sink and adding a second if it’s a master bathroom, replacing any subsurface wood or molding that has rotted, and lighting. Because of all the water involved and the importance of proper sealing around the shower, toilet, and sinks, you need to be sure you get professionals for these jobs, meaning labor often costs up to 20% of the final price by itself. But it’s worth it to spend $2,000 or more for hours of a few pros’ time to ensure you don’t have to replace damaged flooring later. The other major cost is hardware. Tubs can cost anywhere from a few hundred to thousands of dollars, and the same goes for toilets. New vanities also vary, so in total, the tub, shower hardware, toilet, sink, and countertop shouldn’t represent more than 45% of your bathroom remodel budget, less if you have to pay more to redo plumbing because you’re moving the toilet or something.


In much of the country, the basement can become an entirely new room, perfect for an extra bedroom, playroom for the kids, playroom for the adults, or combination utility room with storage. You might not always think of this reno, but it’s on the higher end of value for money, which is what you need to make financing a home renovation project worthwhile. But it’s often expensive, especially if the current basement is just a dingy cement-floored room with one window and the smell of mold. The national average is nearly that of a full kitchen at around $40,000, but the average return on this renovation is nearly 80% nationally, making it one of the most reliable projects.

However, the range on basement costs is large precisely because so many different types of renovations are attempted. An average 600-square-foot basement remodel will still have a lot of costs that you don’t necessarily face in other rooms. For example, finishing the walls and ceiling with insulation, putting in a few new doors, and putting in insulated flooring costs a total of over $6,000 just for materials in most places. Improved electrical wiring and hardware is another few thousand dollars for labor – the materials are relatively inexpensive. Once the room itself is “finished” with normal looking walls and effective lighting and heating, you still have to put in the entertainment elements, storage, or whatever else is necessary to get the room ready for the intended function. And if you want to add a bathroom, that’s a minimum of $10,000 if you’re lucky enough to be able to line it up below an existing bathroom to keep plumbing costs down.

These popular, high-value home renovations are a great benchmark to begin thinking about financing your home renovation project. Use them and some estimates from local suppliers and contractors to ballpark your plans and start the adjustment process necessary to find the right balance of achieving your renovation goals and staying within a reasonable, manageable budget in terms of future refinance payments.