Home renovations can be unpredictable and anxiety-laden at the best of times. But soaring costs, rising interest rates, cooling home prices and uncertainty about Canada’s economic outlook are increasing the financial risks associated with a major property uplift, some real estate experts warn.
Homeowners with large mortgage balances should “be careful with renovations right now,” said Nasma Ali, broker and founder of One Group Toronto Real Estate.
On top of sky-high materials and labour expenses driven by supply chain snarls and worker shortages, another squeeze on some home renovators’ budgets is coming from rising borrowing costs. Home equity lines of credit (HELOCs), which homeowners often rely upon to finance major improvements, generally come with variable interest rates, which have been climbing as the Bank of Canada has raised