How Can You Pay for Minor Home Expenses?

First Republic Bank
October 27, 2020

Even the most diligent planner can sometimes bump up against an unexpected home expense — or be surprised by one that costs more than expected. A renovated yard for outside entertaining, an upgrade for energy efficiency, or new granite countertops can all enhance your enjoyment of your space. Whether you’re an amateur chef, a master gardener, or just dedicated to weekly family game night, the magic happens at home.

With a little creative planning — and a touch of financial forethought — you can keep your home properly maintained and design the sanctuary you deserve, all while increasing your home’s overall value and neighborhood cachet.

What are some ways to pay for home expenses and make personalized improvements?

Home repairs and home-buying expenses are often money-wise choices, but many — like a roof repair after a storm, swapping out single-pane windows or even a living room update (especially if you’re spending more time at home!) — don’t often have a dedicated line item in a day-to-day personal budget.

How can a money-smart homeowner plan to finance a mid-scale home expense without affecting the trajectory of a long-term financial plan?

  • Tap into savings. Homeowners can avoid borrowing if they have the funds set aside. On the other hand, this strategy can also erode a hard-won safety net or derail other financial goals for those funds.
  • Swipe a credit card. Access to plastic is quick and easy, but high-interest revolving debt can quickly compound, creating a higher than necessary financial obligation.
  • Take out a home equity line of credit (HELOC). Secured by the equity in your home, a HELOC is an open line of credit that you can draw from as needed. Essentially, you borrow only the amount you need, when you need it, and then typically repay over a 10- to 15-year term. If your project is more substantial in scope (either in time or dollars), a HELOC may be a better fit for your needs than a personal loan or a personal line of credit. Keep in mind that HELOCs tend to have variable rates, as well as early termination or prepayment penalties.
  • Apply for a personal loan. This type of lump-sum loan is often unsecured. Be aware that rates can be high and there may be an associated origination fee or prepayment penalty. Check with potential lenders for specific details, which can vary dramatically for this type of loan.
  • Open a personal line of credit. Similar to a HELOC, a personal line of credit offers easy access to a set amount of funds at a low interest rate. A personal line of credit is an unsecured loan, which means it is not secured by the value of your home or any other assets. In short, a personal line of credit can be accessed incrementally and only as needed, while also reducing the need to liquidate any existing emergency savings, investment or retirement fund accounts.
First Republic’s Personal Line of Credit – access funds with fixed rates from 2.25% APR (with discounts).

How much will that home enhancement cost?

Even a minor repair can be surprisingly costly, and different projects have varying effects on resale value. Across the nation, the median amount spent for home expenses like decorating, renovating, repairing and homebuilding was $13,000 in 2019, according to a 2020 Houzz & Home report. And some projects can easily bump up toward the six-figure mark.

Here’s a quick cost guide for some of the most commonly initiated home projects.

Take on a minor kitchen remodel

Expect to spend an average $23,452 to replace cabinet fronts and hardware, upgrade appliances, replace laminate countertops and flooring, and paint the drywall and trim. Keep your appliances properly maintained to keep them running like new — and to avoid unnecessary repair or replacement costs.

Add solar panels

A 6kW solar panel system installation will cost $19,043, on average, for a 1,500-square-foot home, a cost that may be offset by lower monthly electric bills or available local rebates or incentives. Still, efficient energy is a pricey upgrade, one that’s most cost-efficient if you have a high energy bill and/or plan to stay in your home for the long term. Learn more about solar financing.

Build an in-ground cement pool

Few home upgrades can build family memories quite like the addition of an in-ground swimming pool. Yet at a national average cost of $60,000, those memories won’t come cheap. Still, for many homeowners, watching their kids, friends, or other loved ones splash around makes the price tag worth the plunge. Learn more about how to get financing for a swimming pool.

Replace or repair a roof

A new asphalt shingle or metal roof can average between $24,700 and $40,318, respectively, but it’s an upgrade with staying power — between 20 and 25 years, in general, and can stave off a host of not-so-fun homeowner problems like a water leak, mold or other internal damage.

Upgrade a bathroom

A bathroom has the potential to be a relaxing respite from the world, which is perhaps why a bathroom upgrade is one of the most popular home improvement projects. A mid-range bathroom remodel cost will average $21,377, which includes new fixtures, tub, toilet, vanity and sink, flooring, and vinyl wallpaper, all of which can be styled to create a private sanctuary for those I-really-want-to-be-alone moments.

Update a living room

Common spaces are among the most used in any home, which is why it often makes long-term sense to invest in comfort-adding improvements and high-quality furnishings. The cost to renovate a 250-square-foot living room can average $7,400, which doesn’t include the cost of a new sofa or casegoods such as a coffee table, which can easily add a few thousand dollars to the overall cost.

Purchase a new boiler

A new boiler may not be the most fun purchase, especially when it can cost between $1,500 and $15,000, depending on the size, configuration, efficiency and fuel type. Still, it’s a homeowner necessity to replace this hot-water appliance — and fast — toward the end of its lifespan. The good news: An annual maintenance agreement with a trusted service provider can easily extend the life of a boiler, which can minimize those long-term new purchase costs.

Replace windows

Upgraded windows can make your home more energy secure while also cutting energy bills. Ten new double-hung windows with custom-color exterior finish and trim can run about $17,641 for vinyl or $21,495 for wood.

Are home updates and repairs tax-deductible?

In general, home expenses for improvements aren’t tax-deductible, although there are some exceptions for the installation of energy-efficient or medically necessary equipment.

Under the Tax Cuts and Jobs Act of 2017, the interest on a home equity line of credit may be tax deductible if the funds from that line of credit are used to “substantially improve” the borrower’s home, according to the IRS.

Still, tax advantages change frequently, so it’s best to chat with a tax professional before making any pricey upgrade.

From now to wow: How a Personal Line of Credit can fund home enhancements

Home expenses don’t always follow a predictable timetable, whether you’re upgrading after a first-time home purchase, to boost resale value or to make structural changes. That’s why it’s often efficient to explore financing early, before it's even needed.

Specific terms vary by lender, but a low-rate personal line of credit can offer the flexibility and access to funds required to keep up with your home-related needs and upgrades. Ready to get started? Check out the personal line of credit calculator or reach out to a dedicated First Republic personal banker today.


First Republic’s Personal Line of Credit – access funds with fixed rates from 2.25% APR (with discounts)1.

1. Annual Percentage Rate. Rates effective as of 06/15/2020 and are subject to change.

Borrower must open a First Republic ATM Rebate Checking account (“Account”). Terms and conditions apply to the Account. If the Account is closed, the rate will increase by 5.00%. Rates shown include relationship-based pricing adjustments of: 1) 2.00% for maintaining automatic payments and direct deposit with the Account, 2) 0.50% for depositing and maintaining a deposit balance of at least 10% of the approved loan amount into the Account, and 3) an additional 0.25% for depositing and maintaining a deposit balance of at least 20% of the approved loan amount into the Account.

Personal Line of Credit consists of a two-year, interest-only, revolving draw period followed by a fully amortizing repayment period of the remainder of the term. Draws are not permitted during the repayment period. Full terms of 7, 10 and 15 years available.

This product can only be used for personal, family or household purposes. It cannot be used for the following (among other prohibitions): to refinance or pay any First Republic loans or lines of credit, to purchase securities or investment products (including margin stock), for speculative purposes, for business or commercial uses, or for the direct payment of post-secondary educational expenses. This product cannot be used to pay off credit card debt at origination.

Personal Line of Credit minimum is $65,000; maximum is the lesser of $350,000 or debt to be repaid at origination plus $100,000. If no debt to be repaid at origination, the maximum loan amount is $100,000. Line of credit cannot be fully drawn at origination.

The terms of this product may differ from terms of your current loan(s) that are being paid off, including but not limited to student loans. By repaying such loans, you may permanently be giving up tax and repayment benefits, including forbearance, deferment and forgiveness, and you may not be able to re-obtain such benefits if this loan is refinanced with another lender in the future.

Contact your legal, tax and financial advisors for advice on deciding whether this is the right product for you. Terms and conditions apply.

Product is not available in all markets. For a complete list of locations, visit Applicants must meet a First Republic banker to open account. This is not a commitment to lend; all lending is subject to First Republic’s underwriting standards. Applicants should discuss line of credit terms, conditions and account details with their banker.

The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document.

This information is governed by our Terms and Conditions of use.