Using a HELOC to Finance Your Pool (Complete Guide)

Inground pools cost $50,000 to $100,000+. Unless you've got that in cash, you need financing.

Pool dealers will happily offer you a loan. Don't take it—at least not without understanding why a HELOC is usually the smarter choice.

Why HELOC Works Great for Pools

1. Lower Interest Rates

HELOC rates: 7-9% typically Pool dealer financing: 12-18% often

On a $60,000 pool financed over 10 years:

• HELOC at 8%: $728/month, $27,360 total interest
• Dealer loan at 15%: $968/month, $56,160 total interest

That's nearly $29,000 in savings.

2. Phased Draw Matches Construction

Pool construction happens in stages:

1. Excavation and steel
2. Plumbing and electrical
3. Gunite/shell
4. Tile and coping
5. Decking and equipment
6. Final touches

With a HELOC, you draw money as needed. Pay the excavation team when excavation is done. Pay the electrician when electrical is complete.

You only pay interest on money you've actually drawn. A lump-sum loan charges interest on the full amount from day one.

3. Flexibility for Add-Ons

Pool projects grow. You budget $60K, then decide to add:

• Patio/deck extension: $8,000
• Landscaping: $5,000
• Outdoor kitchen: $15,000
• Pool heater upgrade: $3,000

A HELOC credit line handles this. A fixed loan doesn't—you'd need to apply again.

4. No Prepayment Penalty (Usually)

Most HELOCs let you pay off early without fees. Pool dealer loans often lock you into the full term.

If you get a bonus or inheritance, pay off your HELOC and stop the interest. Try that with dealer financing.

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HELOC vs Pool Dealer Financing

The Dealer Financing Trap

Pool companies make money on financing. Here's how:

"Same as cash" deals: 0% for 12 months sounds great—until you miss the payoff deadline and owe 24% retroactively on the full original balance.

Marked-up rates: Dealer isn't the lender. They partner with financing companies and add margin. Your 12% rate includes their cut.

Hidden fees in pool price: Some dealers inflate the pool price to offset "great financing terms." You're paying for it either way.

Shorter terms: Dealer loans often max at 7-10 years. A HELOC gives you a 10-year draw period plus 20-year repayment—much more flexibility.

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HELOC vs Personal Loan for Pool

Personal loans don't use your home as collateral. That sounds good until you see the rates:

For a $60,000 pool, that rate difference costs $15,000+ over 10 years.

Choose personal loan if:

• You have excellent credit (might get under 10%)
• Pool cost is under $20K
• You absolutely cannot risk your home

Choose HELOC if:

• Pool cost is $30K+
• You want lowest possible rate
• You have solid home equity

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The Tax Question (Probably Not Deductible)

Here's what the internet gets wrong about pools and taxes.

Old rule (pre-2018): HELOC interest was deductible for any purpose.

Current rule: HELOC interest is only deductible if you use the funds to "buy, build, or substantially improve" your home.

Does a pool count?

Maybe. A pool can count as a home improvement, but:

• Must increase home value
• Must be permanent (inground, not above-ground)
• Some gray area in IRS interpretation

The medical exception:

If a doctor prescribes a pool for medical treatment (chronic back pain, rehabilitation, etc.), it may be deductible as a medical expense. You'll need documentation.

Bottom line: Don't count on the deduction. If your CPA says it qualifies, great—but plan your budget assuming no tax benefit.

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How Much Does a Pool Cost in 2026?

Current pool pricing (varies by region):

Don't forget extras:

A "$60,000 pool" often becomes $80,000+ with necessary additions. Build this into your HELOC amount.

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Does a Pool Add Home Value?

Honest answer: pools rarely pay for themselves.

National average: Pools recover 40-50% of cost at resale.

Translation: Your $70,000 pool might add $28,000-$35,000 to sale price.

Factors that affect ROI:

• Climate (pools worth more in Arizona than Minnesota)
• Neighborhood (are other homes pool-equipped?)
• Pool condition at sale
• Buyer demographics (families might want it; retirees might not)

The real reason to get a pool:

Lifestyle, not investment. If you'll use it for 10+ years and it brings your family joy, that has value—just not resale value.

Don't let a salesperson tell you "the pool will pay for itself." It won't.

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How to Use HELOC for Pool Financing

Step 1: Get Pre-Approved First

Before you even talk to pool companies, know what you can borrow. This:

• Sets your realistic budget
• Gives you negotiating power
• Prevents falling in love with a $100K pool on a $60K budget

Step 2: Get Pool Quotes

With budget in hand, get 3+ quotes from pool builders. Compare:

• Total price (including permits, electrical, everything)
• Timeline
• Warranty
• References

Step 3: Negotiate the Pool Price

Cash buyers (that's you with a HELOC) have leverage. Pool companies prefer cash to managing financing. Ask for 5-10% discount for "cash" payment.

Step 4: Draw as Construction Progresses

Don't pay everything upfront. Standard payment schedules:

• 10-20% at contract signing
• Progress payments at milestones
• 10% holdback until completion

Use your HELOC draws to match this schedule.

Step 5: Inspect Before Final Payment

Don't release final payment until everything works. Test the pump, heater, lights, and filtration. Note any issues in writing before paying.

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FAQ

Is using a HELOC for a pool a good idea?

If you can afford the payments and want the lowest financing cost, yes. HELOCs typically save thousands compared to dealer financing. Just understand your home is collateral.

Is HELOC interest tax-deductible for a pool?

Maybe. Pools may qualify as "home improvement" under current tax law, but it's a gray area. Don't assume deductibility—consult a CPA.

How much should I budget for a pool?

Take the pool quote and add 20-30% for extras (decking, landscaping, fencing, permits, unexpected costs). A $60K quote often becomes $75K-$80K total.

Should I use dealer financing or HELOC?

HELOC almost always wins on rate. Dealer financing is faster but costs significantly more over time. The only reason to use dealer financing: you have zero home equity.

Does a pool increase home value?

It adds some value (typically 40-50% of cost) but rarely "pays for itself." Buy a pool for enjoyment, not as an investment.

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Ready to Get Pre-Approved?

Know your HELOC budget before pool shopping. HonestCasa shows you what you qualify for in minutes—so you can negotiate with real numbers, not guesses.

[Check Your Pool Budget →]