How to Finance Your 2025 Bathroom Remodel

With the start of the new year, many of us are thinking of new projects, like remodeling our bathrooms. After all, we spend more time in these spaces than in most other rooms in our homes. But a remodel requires a lot of decisions—and often the first, before diving into materials, colors, and finishes, is how to pay for your remodel. At Re‑Bath, we strive to make the remodeling process easier, including understanding the many options for bathroom remodel financing.

Option 1: Home Equity Loan

With a Home Equity Loan, you borrow against the equity you’ve built up in your home to fund home improvement projects. Unlike a cash-out refinance (which we talk about below), this loan doesn’t pay off your existing mortgage; it only provides you with extra cash to pay for updates.

Pros:

• If you have plenty of home equity, this is a great option for securing funds for your dream project.
• Interest paid on home equity loans is tax deductible if the money is used to improve your home.

Cons:
This type of loan is secured, meaning it’s tied to collateral, and if you’re unable to make payments, the bank can take ownership of your home.

• Interest rates can fluctuate, which may increase your monthly payments.
• Borrowing against your home reduces its equity, which could limit your financial options in the future.
• Home equity loans usually have closing costs, such as application, appraisal, and recording fees.

Option 2: Home Equity Line of Credit (HELOC)

A HELOC is similar to a Home Equity Loan, but more like a credit card: you borrow from a pre-approved limit. Once it’s paid off, you can borrow again. But remember, like a Home Equity Loan, a HELOC is secured by your home, putting you at risk as a homeowner if you cannot make payments.

Pros:

• HELOC closing costs are very low (sometimes zero!), making it a great option for funding smaller, ongoing projects.
• You only pay interest on the amount you borrow, not the overall spending limit.
• You can draw funds whenever you need them.

Cons:

• HELOC interest rates are not locked in—they can rise or fall over the term of your loan.
• Like a Home Equity Loan, a HELOC is secured to your home; if you cannot make payments, the bank can take ownership of your home.
• Borrowing against your home reduces its equity, which could limit your financial options

Deciding between a Home Equity Loan vs a HELOC? You’re not alone.Learn more here.

Option 3: Cash-Out Refinancing

Cash-out refinancing refers to when you refinance a new mortgage loan, but with a larger balance than what you owe, and then pay off your existing mortgage and keep the remaining cash. That extra money comes from equity in your home, and you can use it to fund home improvements. Because the closing costs apply to the entire loan amount, cash-out refinancing only makes sense if the new interest rate is much lower than your current rate.

Pros:

• Cash-out refinancing can help you acquire the amount of funds you need, based on your home equity.
• You can apply a large influx of cash toward improvements that greatly improve the value of your home.
• You can enhance your property without paying out of pocket.
• Any leftover cash can be used for whatever you like (like fluffy new towels or a cozy robe!).

Cons:

• Cash-out refinancing only makes sense if the new interest rate is much lower than your current rate.
• There are risks involved because your home is collateral.
• Financing short-term costs with long-term debt can be risky – make sure the home improvements you’re financing will increase your house’s value.

A new bathroom often increases the sales appeal and value—not to mention your enjoyment—of your home. Find out howRe‑Bath can help you remodel your bathroom into a space you’ll love for years.

Option 4: Credit Card

So many credit cards offer rewards these days—and if you have one, it might be worthwhile using it to fund your home improvements. Just remember that credit cards typically come with higher interest rates than loans, so it’s in your best interest (literally!) to pay them off quickly.

Pros:

• Earn rewards while paying for the bathroom of your dreams.
• You don’t need to put up collateral, like your home, to get financing.
• Credit cards are easy to use, allowing you to pay for services with a tap or swipe.

Cons:

• Credit cards usually come with higher interest rates than loans.
• Carrying a high balance on your credit card can lower your credit score, which can make it more expensive to borrow money in the future.
• Credit cards may have annual fees, cash advance fees, and late fees.

Option 5: Personal Loan

A personal loan is a good option if you need the funds quickly because of the fast turn-around application process. While you may not require collateral, you’ll likely need good or excellent credit to qualify for the best, lowest interest rates. Rates on personal loans tend to be higher than those on home equity loans, meaning your payments will be higher—but you’ll also pay off the loan faster. If you don’t have much equity in your home, or you want a shorter repayment period, you may want to consider a personal loan.

Pros:

• You don’t need your home as collateral, protecting your equity and property if you default.
• Personal loans generally come with a fixed interest rate.
• Personal loans typically have a faster application process than other financing options, meaning you can start your project sooner.

Cons:

• Interest rates may be higher than secured options like a HELOC if you have substantial home equity.
• Missed payments on a personal loan can negatively affect your credit score.
• You need good or even excellent credit to get the best interest rates.

Option 6: Financing with Re‑Bath

Re‑Bath wants to make financing your bathroom remodel as effortless as we make the remodel itself. Like a personal loan, financing with Re‑Bath isn’t tied to any collateral, such as your home. That’s because we partner with a financial institution to take on the risk. While each Re‑Bath franchise has their own plans, terms, and conditions, all of our loans generally offer lower interest rates than other options, and the financing term can range from 9 months to 72 months. Our options include a same-as-cash benefit (with no payments), equal payments or no down payment. In addition, these loans are fast and easy to apply for; contact your local Re‑Bath franchise for more details.

Pros:

• Financing with Re‑Bath allows you to keep your cash in an interest-bearing account rather than immediately putting it toward home improvements.
• You often can pay off the loan early without incurring fees.
• Re‑Bath financing is fast and easy to apply for with no fees or no closing costs.
• You can be pre-approved for a maximum limit, so if our contractors discover hidden damage or you make changes during the remodel, you can approve a larger loan amount.

Cons:

• Your credit profile and financial information determine whether you qualify and the rate you receive. If you don’t have good credit, you may get higher interest rates.

Re‑Bath offers financing options so you don’t have to wait to have the bathroom of your dreams. Schedule a free in-home consultation today to learn more.

Option 7: Cash

It takes a lot of discipline, but saving up and paying for home improvements with cash won’t cost you any fees or interest—and it’s a great way to stay within your budget. If a cash option appeals to you, it may be worth considering contractor-offered financing, which can offer the same benefits as cash.

Pros:

• Using cash is great way to stay within budget.
• Loans are fast and easy to apply for—no fees, no closing costs.

Cons:

• Some homeowners prefer to keep their savings in the event of an emergency.
• Removing money from a savings account means losing extra income an interest-bearing account earns.

No matter what financing option you choose, Re‑Bath is here to help. At our free, in-home design consultation, we’ll discuss the factors that determine the cost of a bathroom remodel, from the size and condition of your current space, to the fixtures and materials you choose.

Contact your local Re‑Bath to learn about our financing options and schedule your free in-home design consultation today.