Using a HELOC for a Kitchen Remodel: Costs, ROI, and Tips

Kitchen remodels are one of the most popular home improvement projects—and one of the most expensive. A mid-range kitchen renovation costs $30,000 to $75,000, while high-end remodels can hit $100,000 to $150,000+. Most homeowners don't have that kind of cash sitting around, which is why HELOCs are a popular financing choice.

A HELOC lets you tap your home equity, draw only what you need as the project progresses, and typically offers lower rates than personal loans or credit cards. But kitchen remodels famously go over budget, and a HELOC puts your home on the line if you can't make payments.

Here's what you need to know about using a HELOC for a kitchen remodel, including realistic cost breakdowns, ROI expectations, and how to avoid the horror stories you see on home renovation shows.

What a Kitchen Remodel Actually Costs

Kitchen remodel costs vary wildly based on size, finishes, and whether you're changing the layout. Here's the breakdown by tier:

Budget Kitchen Refresh ($15,000 - $30,000)

What you get:

• Refinished or painted cabinets (no replacement)
• New countertops (laminate or basic quartz)
• New sink and faucet
• Updated lighting
• Fresh paint and backsplash
• Keep existing layout and appliances

Best for: Cosmetic updates before selling or when cabinets are structurally sound but dated.

Mid-Range Kitchen Remodel ($30,000 - $75,000)

What you get:

• Semi-custom cabinets (stock cabinets with custom doors)
• Quartz or granite countertops
• New mid-range appliances (KitchenAid, Bosch, GE Profile)
• Updated electrical and lighting
• Tile or hardwood flooring
• Subway tile or similar backsplash
• New sink and faucet (undermount)
• Minor layout changes possible

Breakdown for a typical 200 sq ft kitchen ($50,000 total):

• Cabinets: $12,000 - $18,000 (35-40% of budget)
• Countertops: $4,000 - $6,000
• Appliances: $5,000 - $8,000
• Labor (installation): $12,000 - $15,000
• Flooring: $3,000 - $4,500
• Plumbing and electrical: $4,000 - $6,000
• Backsplash and finishes: $2,000 - $3,000
• Permits and design: $2,000 - $3,500

Best for: Homeowners staying in their home 5+ years who want modern functionality and aesthetics.

High-End Kitchen Remodel ($75,000 - $150,000+)

What you get:

• Custom cabinets with soft-close drawers and specialty storage
• Premium countertops (marble, quartzite, premium quartz)
• High-end appliances (Sub-Zero, Wolf, Miele)
• Custom lighting design (pendant lights, under-cabinet LED)
• Hardwood or luxury tile flooring
• Designer backsplash (handmade tile, marble slab)
• Farmhouse sink or integrated sink/countertop
• Significant layout changes (moving walls, plumbing, electrical)
• Built-in coffee station, wine fridge, pot filler

Breakdown for a typical 250 sq ft kitchen ($100,000 total):

• Custom cabinets: $30,000 - $40,000
• Premium countertops: $10,000 - $15,000
• High-end appliances: $15,000 - $25,000
• Labor and installation: $20,000 - $30,000
• Flooring: $5,000 - $8,000
• Electrical and plumbing (including layout changes): $8,000 - $12,000
• Backsplash and finishes: $5,000 - $8,000
• Permits, architect, designer: $5,000 - $10,000

Best for: Forever homes or luxury properties where the kitchen is a showpiece.

How a HELOC Works for Kitchen Remodels

The Draw-As-You-Go Advantage

Unlike a personal loan that gives you a lump sum, a HELOC lets you draw funds as expenses arise:

Week 1-2: Demo and permits ($3,000)
Week 3-5: Cabinets ordered, deposit paid ($6,000)
Week 6-8: Electrical and plumbing rough-in ($7,000)
Week 9-11: Cabinets installed ($6,000)
Week 12: Countertops templated and installed ($5,000)
Week 13-14: Appliances, backsplash, final finishes ($8,000)

Total drawn: $35,000 over 14 weeks
Interest paid during renovation: ~$400 (average balance $17,500 at 8% APR)

You only pay interest on what you've actually drawn, not the full credit line.

Typical HELOC Terms

• Credit line: $25,000 - $100,000+ (based on available equity)
• Interest rate: 7.5% - 9.5% variable (as of 2026)
• Draw period: 10 years (interest-only payments)
• Repayment period: 10-20 years (principal + interest)
• Closing costs: Often waived for lines over $50,000

Real Example: A $50,000 Mid-Range Remodel

You own a home worth $450,000 with a $250,000 mortgage. You want to remodel your 180 sq ft kitchen with:

• Semi-custom cabinets
• Quartz countertops
• New stainless appliances
• Updated lighting and flooring

Available HELOC:

• Home value: $450,000
• 80% LTV limit: $360,000
• Current mortgage: $250,000
• Available HELOC: $110,000

You get approved for a $75,000 HELOC at 8.25% variable rate.

Project costs:

• Cabinets: $14,000
• Countertops: $5,500
• Appliances: $7,000
• Labor: $13,500
• Flooring: $3,500
• Electrical/plumbing: $4,500
• Backsplash: $2,000
• Total: $50,000

Monthly payment (interest-only during draw period):

• Balance: $50,000
• Rate: 8.25%
• Monthly payment: $344

If rates rise to 10.25% (2% increase):

• New monthly payment: $427 (+$83/month)

Repayment plan: You pay interest-only for 10 years, then enter a 15-year repayment period.

After 10 years, your payment becomes:

• Principal + interest over 15 years
• New monthly payment: ~$490 (assuming same 8.25% rate)

Better plan: Pay $500-$700/month from the start to pay down principal. At $600/month, you'll have the HELOC paid off in 8-9 years instead of carrying it for 25 years.

Kitchen Remodel ROI: What to Actually Expect

The home improvement industry loves to tout ROI numbers, but they're often misleading. Here's the reality:

National Average ROI (Remodeling Magazine 2026)

• Minor kitchen remodel ($25,000-$35,000): 72-78% ROI
• Mid-range kitchen remodel ($50,000-$75,000): 54-62% ROI
• Upscale kitchen remodel ($100,000+): 45-53% ROI

Translation: A $50,000 kitchen remodel adds roughly $27,000-$31,000 to your home's resale value.

What This Actually Means

If you're selling within 2 years:
You'll lose money on the remodel itself, but:

• Your home will sell faster
• You may get more offers
• Buyers won't negotiate down for an outdated kitchen

If you're staying 5+ years:
You're remodeling for quality of life, not ROI. The "return" is enjoying a functional, beautiful kitchen every day. Resale value is a bonus.

If you're in a hot market:
An outdated kitchen can be a deal-killer. Remodeling might be necessary just to compete with other listings.

The ROI Math Nobody Talks About

Scenario: You spend $50,000 on a kitchen remodel financed with a HELOC at 8.25%.

Cost over 10 years (interest-only payments):

• Total interest paid: $41,250
• True cost of the remodel: $91,250

If you pay it off in 5 years instead:

• Total interest paid: ~$11,000
• True cost: $61,000

Lesson: The faster you pay off the HELOC, the better your true ROI. Carrying the balance for the full draw period destroys your returns.

When a HELOC Makes Sense for Kitchen Remodels

✅ You Have at Least 20% Equity

Don't drain all your equity on a kitchen. Keep a cushion for market fluctuations and emergency access to refinancing.

✅ You're Staying in the Home 5+ Years

If you're selling soon, save your money or do a cosmetic refresh instead of a full remodel. You won't recoup the cost.

✅ Your Kitchen Is Genuinely Dysfunctional

Broken cabinets, nonfunctional layout, outdated electrical—these are good reasons to remodel. "I'm bored of the tile" is not.

✅ You Can Afford the Payment Even If Rates Rise

Budget for a 2-3% rate increase. If that would strain your finances, reconsider.

✅ You Have a Detailed Budget and Contractor Bids

Never start drawing HELOC funds without knowing exactly what the project costs. Get 3 itemized bids from licensed contractors.

When to Avoid a HELOC for Kitchen Remodels

❌ You're Remodeling to Sell Immediately

You'll lose money. Either sell as-is and let the buyer remodel to their taste, or do a light refresh (paint, new hardware, deep clean) for under $5,000.

❌ Your Home Value Is Declining

Don't borrow against a depreciating asset to fund a remodel that won't add value.

❌ You Don't Have 6 Months of Reserves

Kitchen remodels always go over budget. If you're maxing out your HELOC with zero cushion, you're setting yourself up for disaster when the contractor finds mold or outdated wiring.

❌ You Can't Handle Living in Construction

Kitchen remodels take 6-12 weeks. You'll be eating takeout, washing dishes in the bathroom, and dealing with dust everywhere. If that sounds unbearable, save up and rent an Airbnb during construction instead of rushing into debt.

Alternative Financing Options

1. Cash

Pros: No interest, no debt, full control
Cons: Depletes savings, opportunity cost

Best for: Homeowners with substantial liquid assets who don't want to leverage their home.

2. Home Improvement Loan (Fixed-Rate Personal Loan)

Typical terms:

• Loan amount: $10,000 - $100,000
• Rate: 8% - 14% fixed
• Term: 5-10 years
• No collateral (unsecured)

Pros: Fixed payment, no equity requirement, fast approval
Cons: Higher rates than HELOC, lower loan amounts

Best for: Homeowners with limited equity or who want payment certainty.

3. 0% APR Credit Cards

How it works: Some credit cards offer 15-21 months of 0% APR on purchases or balance transfers.

Pros: No interest if paid off during promo period
Cons: High rates after promo ends (20-30%), requires excellent credit, low limits ($10,000-$25,000 typical)

Best for: Small projects under $15,000 that you can pay off within 18 months.

4. Cash-Out Refinance

How it works: Replace your current mortgage with a larger one, taking the cash difference.

Pros: Fixed rate, single payment, potentially lower rate than HELOC
Cons: High closing costs (2-5%), resets mortgage term, only makes sense if you can get a rate close to your current mortgage

Best for: Homeowners with high-rate mortgages who can refinance at a similar or lower rate while pulling out cash for the remodel.

5. Contractor Financing

How it works: Some contractors partner with lenders to offer financing (often through GreenSky or similar).

Pros: Convenient, fast approval
Cons: Rates are often higher (9-16%), hidden fees, less flexibility

Best for: Small to medium projects when you need financing immediately and don't have time to shop lenders.

How to Avoid Kitchen Remodel Disasters

1. Get Three Detailed Bids

Don't accept vague estimates. Demand itemized bids showing:

• Cabinet specifications (brand, style, finish)
• Countertop material and square footage
• Appliance make and model
• Labor broken down by task
• Permits and disposal fees
• Timeline with milestones

2. Add 20% Contingency

Kitchen remodels uncover hidden problems:

• Water damage under the sink
• Outdated electrical that doesn't meet code
• Uneven floors requiring leveling
• Asbestos tile (in older homes)

Budget an extra 20% for surprises. If you come in under budget, great—pay down the HELOC faster.

3. Don't Pay the Full Amount Upfront

Shady contractors will ask for 50-70% upfront, then disappear. Standard payment schedule:

• 10% deposit when signing contract
• 30% when demo is complete and materials arrive
• 30% at midpoint (cabinets installed)
• 25% when countertops and appliances are in
• 5% final payment after inspection and punchlist

4. Verify Licensing and Insurance

Ask for:

• Contractor's license number (verify with your state)
• Proof of liability insurance
• Workers' comp insurance (so you're not liable if someone gets hurt)
• References from projects completed in the last 6-12 months

Call the references. Ask about timeline accuracy, communication, and how they handled problems.

5. Put Everything in Writing

Don't accept verbal agreements. Your contract should include:

• Detailed scope of work
• Materials specified (brand, model, color)
• Start and end dates
• Payment schedule
• Change order process (how additional work is priced)
• Warranty terms

6. Pull Permits

Don't let a contractor talk you into skipping permits to "save money." Unpermitted work:

• Voids your homeowner's insurance if something goes wrong
• Must be disclosed when you sell (or you face legal liability)
• Can result in fines and being forced to tear out the work

Permits typically cost $500-$1,500 for kitchen remodels. It's worth it.

Tax Deductions: What You Can and Can't Write Off

Bad news for most homeowners: Kitchen remodel costs are generally not tax-deductible.

Exceptions:

If You Run a Home-Based Business

You may be able to deduct a portion if the kitchen is used for business (e.g., food blogger, caterer, test kitchen). Talk to a CPA.

HELOC Interest Deduction

As of 2026, HELOC interest is only deductible if the funds are used to "buy, build, or substantially improve" the home securing the loan. Kitchen remodels qualify as substantial improvement.

Requirements:

• You must itemize deductions (not take the standard deduction)
• Combined mortgage + HELOC balance must be under $750,000 (or $375,000 if married filing separately)

Example: You pay $3,000/year in HELOC interest. If you're in the 24% tax bracket and itemize, you save $720 in taxes.

Most homeowners don't itemize anymore due to the higher standard deduction ($14,600 single / $29,200 married in 2026). Run the numbers with a tax professional.

Timeline: How Long Does a Kitchen Remodel Take?

Planning and design: 2-6 weeks
Ordering materials (cabinets have longest lead time): 6-12 weeks
Demolition: 1-3 days
Rough plumbing and electrical: 3-7 days
Cabinet installation: 3-7 days
Countertop template and install: 2-3 weeks (after cabinets)
Backsplash and tile: 3-5 days
Flooring: 2-5 days
Appliance install and final touches: 2-3 days

Total: 12-20 weeks from demo to completion (assumes no major delays)

Cabinet delays are the biggest wildcard. Custom cabinets can take 12-16 weeks. Supply chain issues can add 4-8 weeks. Plan accordingly.

Final Decision Framework

Use a HELOC for your kitchen remodel if:

✅ You have 25%+ equity in your home
✅ You're staying in the home 5+ years
✅ You have 20% contingency in your budget
✅ You can afford payments even if rates increase 2-3%
✅ You've vetted contractors and have detailed bids
✅ Your kitchen is genuinely outdated or dysfunctional

Consider alternatives if:

❌ You're selling within 2-3 years
❌ You have minimal equity
❌ Your budget is already maxed with no contingency
❌ You want fixed payments and can't handle rate volatility
❌ The remodel is purely aesthetic (not functional)

A kitchen remodel can improve your quality of life and make your home more enjoyable. Just make sure you're doing it for the right reasons, with realistic cost expectations, and a solid plan to pay back the HELOC within 5-7 years.

Don't let HGTV convince you that kitchens need to be remodeled every 10 years. If your kitchen works and you like it, spend the money on experiences or investments instead.