Financing in Focus: Role of Secured Loans in Home Improvement
In collaboration with Bank of America

Houzz Research
December 5, 2018
Findings from a survey of 10,301 U.S. homeowners on Houzz who renovated their primary residence in 2017 and paid with secured financing.
1 in 7 uses secured financing to pay for home renovations: One in seven surveyed homeowners on Houzz paid for 2017 renovations with secured financing (15%), such as HELOCs (7%), cash-out refinancing (5%) and home equity loans (4%). A typical (median) homeowner with secured financing spent $32,000 on 2017 renovations, more than double a typical renovator paying only cash ($13,000).
Gen Xers drive borrowing: Renovating homeowners 35 to 54 years old were more likely to pay with secured financing (17%) than those 25 to 34 years old (10%) and 55 and older (15%). Among the borrowers, a typical (median) 35-to-54-year-old homeowner financed $12,800 to $22,200 of the overall renovation spend, a far greater amount than other generations ($10,000 to $19,000).
Secured financing is key to larger projects: Homeowners spending $50,000 or more on renovations were three times as likely to pay for renovations with secured financing (31%) than those spending $5,000 to $14,999 (10%). Larger projects command relatively larger loans and longer payoff schedules.
Many advantages of HELOCs: Promotional low-interest financing is a commonly reported feature of HELOCs (61%), home equity loans (58%) and cash-out refinancing (47%). While low cost is by far the leading reason for choosing cash-out refinancing (39%) or home equity loans (33%), HELOCs’ usage is motivated by ease of use (39%), low cost (38%), quick funds (30%) and tax deductions (29%).
Perceived high costs deter cash payers from using secured financing: One in seven renovating homeowners who used only cash to pay for renovations gave secured financing at least some consideration (16%), with a quarter choosing not to use financing due to perceived high costs (27%).
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Gen Xers drive borrowing: Renovating homeowners 35 to 54 years old were more likely to pay with secured financing (17%) than those 25 to 34 years old (10%) and 55 and older (15%). Among the borrowers, a typical (median) 35-to-54-year-old homeowner financed $12,800 to $22,200 of the overall renovation spend, a far greater amount than other generations ($10,000 to $19,000).
Secured financing is key to larger projects: Homeowners spending $50,000 or more on renovations were three times as likely to pay for renovations with secured financing (31%) than those spending $5,000 to $14,999 (10%). Larger projects command relatively larger loans and longer payoff schedules.
Many advantages of HELOCs: Promotional low-interest financing is a commonly reported feature of HELOCs (61%), home equity loans (58%) and cash-out refinancing (47%). While low cost is by far the leading reason for choosing cash-out refinancing (39%) or home equity loans (33%), HELOCs’ usage is motivated by ease of use (39%), low cost (38%), quick funds (30%) and tax deductions (29%).
Perceived high costs deter cash payers from using secured financing: One in seven renovating homeowners who used only cash to pay for renovations gave secured financing at least some consideration (16%), with a quarter choosing not to use financing due to perceived high costs (27%).
Download the Full Report
See Related Stories:
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