Should You Use Your Home Equity To Remodel? The Smart Way To Maximize ROI

Should you use your home equity to fund home improvements—and which projects are actually worth it?

If you’ve built up equity, it can be a powerful tool to upgrade your home—but only if you invest in the right projects that deliver real value and long-term return.

Why More Homeowners Are Using Equity for Renovations

That kitchen you’ve been mentally redesigning…
The bathroom that’s overdue for an update…
The backyard you keep putting off…

You’re not alone.

Homeowners are expected to spend over $522 billion on home improvements by 2026, and many aren’t pulling from savings to do it. Instead, they’re leveraging something they already have: home equity.

If you’ve owned your home for several years, there’s a strong chance you’ve built up a significant amount of equity—potentially enough to fund meaningful upgrades without starting from scratch financially.

What Is Home Equity—and How Can You Use It?

Home equity is simple:

It’s the difference between what your home is worth and what you still owe on your mortgage.

For many homeowners today, that number is substantial. Some estimates suggest the average homeowner is sitting on hundreds of thousands of dollars in equity.

That equity can be accessed through tools like:

• Home equity loans
• HELOCs (home equity lines of credit)
• Cash-out refinancing

And right now, the top reason homeowners are tapping into that equity is home improvement.

Common Reasons People Use Their Equity:

• Home improvements (45%)
• Debt consolidation (16%)
• Investing in additional properties (16%)

So yes—using your equity to remodel is common. But that doesn’t automatically make it the right move for every project.

Not All Renovations Are Created Equal

Here’s where many homeowners get tripped up:

Just because you can fund a renovation doesn’t mean you should.

The goal isn’t just to upgrade your home—it’s to make smart improvements that hold or increase your home’s value.

That’s especially important if you plan to sell in the next few years.

Some upgrades feel exciting but don’t translate into real return. Others—sometimes surprisingly simple ones—can deliver strong ROI.

Remodeling Projects With the Best Return on Investment

Here’s a breakdown of remodeling projects and how much of your investment you’re likely to recoup, based on data from the National Association of Realtors:

Average return on investment for common home remodeling projects. Source: National Association of Realtors (NAR)

Top ROI Projects:

• New steel front door – 100%
• Closet renovation – 83%
• New fiberglass front door – 80%
• New vinyl windows – 74%
• New wood windows – 71%
• Basement conversion – 71%

Mid-Range ROI Projects:

• Attic conversion – 67%
• Kitchen renovation – 60%
• Minor kitchen upgrade – 60%

Lower ROI (But Still Valuable) Projects:

• Add new bathroom – 56%
• Primary suite addition – 54%
• Bathroom renovation – 50%

What This Means for Your Remodeling Decisions

There are two key takeaways here:

1. Smaller Projects Can Deliver Big Returns

A front door upgrade might not be the most exciting project—but it delivers one of the highest returns.

2. Bigger Projects Still Matter—Strategically

Kitchen and bathroom renovations may not recoup 100% of the cost, but they:

• Improve marketability
• Attract more buyers
• Help your home stand out

That can lead to faster sales and stronger offers, which don’t always show up in simple ROI percentages.

Should You Use Your Equity for Renovations?

Here’s a practical way to think about it:

It may make sense if:

• You’re tackling a larger, value-adding project (like a kitchen or layout improvement)
• You plan to stay in the home long enough to enjoy the upgrades
• The renovation aligns with what buyers in your area actually want

It may not make sense if:

• You’re funding cosmetic or low-impact upgrades
• The project doesn’t improve resale value
• It pushes your loan-to-value ratio too high

This is where having the right guidance matters.

Why Local Insight Changes Everything

National data gives you a baseline—but what works in one market doesn’t always translate directly to another.

That’s where working with a local expert makes a difference.

At The McClung Group, we help you look at:

• What buyers are actively looking for right now
• Which upgrades are helping homes sell faster
• Where you’ll actually see a return in your specific market

Because the goal isn’t just to remodel—it’s to make decisions that move you forward financially.

A Smarter Approach Before You Start Any Project

Before you commit to a renovation, take these steps:

1. Get a current home value estimate
2. Identify your available equity
3. Prioritize projects with proven ROI
4. Talk with a real estate expert about buyer preferences
5. Consult a financial advisor if you’re borrowing against equity

This approach helps you avoid over-improving—or investing in upgrades that won’t pay off.

The Bottom Line

The upgrades you’ve been thinking about may be more within reach than you realize.

Your home equity can be a powerful tool—but the real advantage comes from using it strategically.

Because the right improvements don’t just make your home look better—they position you for a stronger return when it matters most.

Ready to Talk Through Your Options?

If you’re considering using your equity to remodel, it’s worth having a quick conversation first.

We can walk through:

• What your home is worth today
• How much equity you may have
• Which upgrades make the most sense for your goals

Schedule a call with The McClung Group, and we’ll help you make a confident, informed decision about your next move.