A homeowner doesn’t have to be shopping for a new house to face a financing decision. A roof replacement or failed heating system can force one.
Cash savings funded 75.7% of home improvement projects in a new LendingTree analysis, far outpacing home equity loans and cash from refinancing. But the projects financed with equity loans were considerably larger, pointing to a different conversation for originators when a repair bill exceeds what a borrower can comfortably pay out of pocket.
The median cash-funded project cost an estimated $1,902, compared with $7,924 for projects funded with home equity loans.
The findings offer a reason to reconnect with past clients about planned work and available cash. A borrower may need help comparing financing options long before another home purchase enters the picture.
Bigger Jobs Change The Conversation
Home equity loans funded 3% of projects, while cash from refinancing covered 2.3%. Credit cards or retail store charge cards funded 6.3%.
Those figures measure shares of projects, not shares of total renovation spending. They also don’t establish that demand for equity loans is growing.
The difference in project size matters. A homeowner replacing an appliance faces a different decision from one undertaking substantial repairs. Cash can avoid borrowing costs, but a larger withdrawal can leave less money available for the next emergency.
Matt Schulz, LendingTree’s chief consumer finance analyst, said savings generally make sense when a homeowner can pay without exhausting an emergency fund or sacrificing other financial goals. Borrowing against equity may be reasonable for a large, necessary project when the borrower has stable income and a clear repayment plan, he said.
That makes the size of the job and the borrower’s remaining savings useful starting points for an originator’s conversation. Financing a project should solve the immediate need without leaving the household with an unmanageable payment.
NMP has previously reported on second liens as a borrower retention strategy, including options that allow homeowners to access equity while retaining their existing first mortgage. The LendingTree findings add a concrete reason for those conversations: the work a homeowner needs to complete.
Affordability Continues After Closing
The analysis also underscores the limits of judging affordability by the monthly payment alone.
Estimated annual routine maintenance and upkeep averaged $1,433 for owner-occupied homes, rising to $1,706 for properties built before 1940. Those figures describe routine upkeep, rather than a comprehensive budget for major renovations.
For buyers considering an older property, the cash left after closing deserves attention alongside the down payment and monthly payment. A lower purchase price can leave room for needed work, but buyers still need a way to pay for it.
“Some fixes are optional, but others, such as replacing a damaged roof or a broken HVAC system, simply can’t be postponed for long,” Schulz said.
The most common project category combined additions or replacements of water heaters, dishwashers, and garbage disposals, accounting for 11.7% of projects. HVAC installation or replacement accounted for another 9.1%, while roofing repairs or replacements made up 5.9%.
That mix puts essential equipment and repairs alongside discretionary upgrades in the home improvement market.
A Reason To Stay In Touch
Nearly six in 10 owner-occupied homes underwent improvements during the survey’s two-year reference period. The 51.6 million improved properties accounted for about 139.9 million projects, averaging 2.7 per improved home.
The report uses the Census Bureau’s 2023 American Housing Survey. Its project activity reflects that survey’s two-year lookback, and the reported dollar estimates are expressed in 2025 dollars. The findings are not a measure of renovation activity in 2026.
For originators, a useful follow-up with a past client can begin with a straightforward question: What work is coming up on the house, and how do you plan to pay for it?
