The most money and lowest monthly payment for your renovation

Borrow up to 90% of your future home value with a RenoFi Renovation Loan


An ever-increasing number of homeowners are making the decision to transform their backyard into an outdoor oasis, and this trend looks set to continue well into 2021.

After all, with most of us having spent more time at home than ever before over the last year as a result of the pandemic, attentions have turned to what we really want from our homes, and what we could add to create that forever home and to give the whole family a relaxing environment both for work and for play.

For many, that means creating a relaxing outdoor space and a backyard transformation, especially when indoor spaces including the kitchen and master bathroom don’t need upgrading.

And while it’s not uncommon for the installation of an inground pool to be the project that’s right at the top of people’s wishlists, the build of an outdoor kitchen is becoming increasingly popular. This perhaps comes as no surprise, given the appeal of creating a functional outdoor space that can be used as a central gathering space in the backyard.

But building an outdoor kitchen is far from a one-size-fits-all project, and this means that the cost can vary significantly both based on the specification and scale as well as your location. Often, homeowners need to find the best way to finance this type of addition to their backyard, and in this guide, you’ll learn about the most suitable options.

Specifically, we’re going to take a look at:

According to HomeAdvisor, the average outdoor kitchen costs an average of $13,286 to build, but let’s make one thing clear; no two projects of this type are the same and, therefore, the associated costs can vary significantly.

In fact, we recently teamed up with Lucy Middaugh, an exterior designer based in California, to better understand the typical costs associated with a number of backyard renovation projects.

Lucy commented on the average cost of an outdoor kitchen, stating that, “If you’re looking at just a grill set-up, an island area and some cabinetry, your estimate will start at around $10,000, but average around $15,000-$20,000 and it’s not hard to spend $30,000 to $40,000 on a luxury BBQ island.”

Budget somewhere between $15,000 and $20,000 for an average outdoor kitchen build as a starting point but expect this to increase pretty quickly as you make additions to the specification or choose to splash out on a luxury island.

In fact, returning to HomeAdvisor’s cost estimates, we can see that the upper end cost comes in at $38,000 across the projects that the data is based upon.

Before thinking about how you’re going to finance your project, take the time to think carefully about what you really want. Is that a built-in BBQ grill? A pizza oven? An outdoor kitchen sink? A firepit?

Don’t then forget to think about whether you want to add an enclosure of some type, whether that’s a pergola, gazebo, or even a more costly patio enclosure. Then there’s lighting to consider, of course.

No two outdoor kitchens are the same and it pays to stop to think about what makes the most sense for you and your family. At the end of the day, spending a little more is always worth it if it means you’re getting the space you want, rather than having to compromise, and when you’re able to finance the cost with affordable monthly payments over a number of years, this makes total sense.

Does an Outdoor Kitchen Add Value to Your Home?

Outdoor kitchens are in demand right now. In fact, when we analyze data from Google Trends, we see that consumer interest has doubled in the last 12 months.

And, according to Apartment Therapy, this means that “Transforming your backyard into a resort-like setting that includes an outdoor kitchen will set your listing apart from others in your neighborhood—and increase your home’s resale value.”

But just how much value does building an outdoor kitchen add?

Based upon data taken from HouseLogic by Realtors, these projects typically get a 71% return on investment. This means that you should expect to see $7,100 added to your home’s value for every $10,000 that you invest.

It’s not just about the value that an outdoor kitchen adds to your home, however. Stop and think about what you really want from your home and find the best way to get started on the projects that mean the most to your family.

If you spend a lot of time outside but don’t have that luxury outdoor cooking space you’ve always dreamed of; go ahead and get it built. We’re pretty sure you won’t regret it and the fact that you’re going to see a large percentage of the money you invest returned is a bonus.

Is Your Outdoor Kitchen Build Part of A Bigger Backyard Renovation Project?

An outdoor kitchen build is often considered as part of a much bigger backyard renovation wishlist that commonly also includes the construction of an inground swimming pool, landscaping, a new deck, or a patio, alongside other luxury additions.

Let’s face it; if you’re going to create the perfect outdoor space, there’s no harm in dreaming big and putting together a wishlist that contains all of the projects that would turn your current backyard into somewhere that you’ll never want to leave.

And while for some, an outdoor kitchen is all that’s missing, for others, there’s more on that wishlist.

But all too often, homeowners complete these projects one at a time over many years. Others compromise on the specs of their outdoor project rather than going for what they dreamed about.

Why? Because they wrongly assume that they’ll need to do this while they save up the cash or build up the equity that they think they need to be able to afford to complete everything that’s on the plan.

It doesn’t have to be this way though. Options exist that can help you to finance your dream outdoor project today, even if you haven’t got enough tappable equity in your home and without forcing you to turn to high-interest personal loans that come with expensive monthly payments.

Keep reading and we’ll shine a light on the pros and cons of 7 different outdoor kitchen financing options and help you to find the right way to borrow the money you need to give the go-ahead on the project you want to get started on, not the one that you’ve reluctantly reduced the scope of because you didn’t know how to pay for it.

The Pros & Cons of 7 Ways To Finance Your Outdoor Kitchen

Let’s compare side by side the most popular outdoor kitchen financing options to help you see how they stack up against each other so that you can make the right decision based on your individual situation.

RenoFi LoansStandard Home Equity LoanConstruction LoanPersonal LoanCashCash-out RefinanceFannie Mae Homestyle or 203k
Loan based on the after renovation valueYesNoYesNoNoNoYes
Borrow up to 90% after renovation valueYesNoNoNoNoNoYes
Refinance requiredNoNoYesNoNoYesYes
Requires inspections & drawsNoNoYesNoNoNoYes

A RenoFi Loan

Let us introduce you to RenoFi Loans; a type of home renovation loan that could be the perfect way for you to borrow all of the money you need to carry out your entire backyard makeover in one go.

This new type of loan combines the best elements of a construction loan with a home equity loan, factors in what your home will be worth after construction is complete, meaning that you’re able to borrow all of the money you need at the lowest rate possible without being forced to reduce the scope of your project or carry it out bit-by-bit over many years.

A RenoFi Loan can help you to create your forever home today, meaning you’re able to enjoy the space that you design and build with the comfort of affordable monthly payments.

But perhaps what makes this type of financing so attractive is that it’s accessible to newer homeowners who don’t have the equity available to take out a home equity loan or line of credit, to use a cash-out refinance or who are sensible enough not to use a high-interest personal loan or credit card.

RenoFi Loans are available as either a home equity loan or a home equity line of credit (HELOC), with the latter being the perfect way to be able to afford to undertake your entire backyard makeover over a longer period of time, giving you the flexibility of drawing what you need when you need it.

Here’s what you need to know about the RenoFi Home Equity Loan:

  • Loan amounts from $20k to $500k
  • Same low fixed rates as traditional home equity loans
  • Term up to 20 years
  • Ability to borrow up to 90% of the after renovation value
  • Full loan amount available at closing

And here’s what you need to know about the RenoFi Home Equity Line of Credit:

  • Loan amounts from $20k to $500k
  • Variable rates
  • 10 year interest-only period, followed by 20 year amortization
  • Ability to borrow up to 90% of the after renovation value
  • Line of credit that can be drawn down & paid back at your leisure for 10 years

Sounds great, yeah?

Don’t forget that while RenoFi Loans offer loan amounts from $20k and the average outdoor kitchen typically comes in somewhere between $15k and $20k, this is the perfect way to go big and add that extra touch of luxury to your outdoor space, or to tick off other projects from your renovation wishlist at the same time.

Whatever your forever home looks like, this new type of financing can make it happen.

Why not arrange a chat with one of our advisors today to discover whether a RenoFi Loan could be the perfect way to finance your outdoor kitchen and make your dream backyard a reality. Alternatively, use the RenoFi Loan Calculator to see how much you could borrow and what your monthly payments would be.

A Home Equity Loan or Line of Credit (HELOC)

A home equity loan or line of credit (also known as a HELOC) is a second mortgage that allows you to borrow against the equity that’s built up in your home.

But as we’ve already mentioned, it takes time to build up enough equity to be able to use this option to finance your outdoor kitchen. And for this reason, these simply aren’t an option for many homeowners who don’t have enough tappable equity available.

That said, these remain a popular choice for homeowners who have lived in their home for many years, although we’re the first to encourage you to consider how a RenoFi Loan could let you borrow more money while keeping your monthly payments as low as possible.

A Cash-Out Refinance

In most instances, refinancing to pay for home improvements is one of the dumbest things that homeowners do. That is unless they’re refinancing onto a significantly lower rate.

A cash-out refinance involves refinancing your first mortgage to release some of the equity that’s been built up; again, not an option if you’re a recent homebuyer who hasn’t got this available.

Most cash-out refinances will also only let you tap up to 80% of your home’s current value, meaning that your borrowing power will be reduced when compared with a RenoFi Loan or other financing option that lets you borrow based on your home’s after renovation value.

For these reasons, this probably isn’t the best way for you to finance your outdoor kitchen.

A Construction Loan

You shouldn’t use a construction loan to pay for any home improvement project.

These loans are designed to be used for the purchase of land and ground-up construction of a home, not as a way to pay for renovations or additions. Yet they still get used in this way because of the fact that they let you borrow against your home’s future value, resulting in homeowners unnecessarily forced to refinance (often at a higher rate), pay higher closing costs, and navigate their way through the complicated draw process.

Avoid construction loans completely wherever possible; they’re certainly not the best way to finance an outdoor kitchen, that’s for sure.

A HomeStyle Loan

Maybe you’ve heard about FHA 203k and Fannie Mae HomeStyle Loans and have been considering these as a way to finance your outdoor project?

Both of these government-backed mortgages let you borrow based on your home’s future value, but only a HomeStyle Loan can be used to pay for luxury additions.

FHA 203k Loans don’t allow these which, if you hadn’t already guessed, include outdoor kitchens, BBQ grills, and other similar luxuries that you’ve maybe considered.

Read our full comparison on FHA 203k Loans vs Fannie Mae HomeStyle Loans to learn more.

And while a HomeStyle Loan may let you borrow the money you need to get started on your project, that doesn’t mean they’re the best option, especially when you consider that you’ll need to refinance, that they involve a complex process that’s known to result in significant delays, higher fees and costs than alternatives and a noticeably higher interest rate.

There’s probably going to be a better option for most homeowners.

The only exception to this is for those who have a lower credit score, given that the requirement for this loan is lower than other options.

If you’re unable to qualify for a RenoFi Loan because your credit score is too low, let’s say, a HomeStyle Loan is likely going to be the recommended route to go down.

A Personal Loan (Home Improvement Loan)

You’ve probably heard of home improvement loans. They’re also sometimes advertised as backyard improvement loans.

Maybe you’ve even considered applying for one to pay for your outdoor kitchen. But did you know that these are often high-interest unsecured loans?

And let’s make one thing clear; most homeowners shouldn’t use a personal loan to pay for home improvements. And that includes as a way to finance a backyard makeover.

Why? The reasons are pretty simple:

  • The interest rates on personal loans are usually significantly higher than options such as RenoFi Loans, home equity loans or a cash-out refinance. Commonly, this will be between 8% and 15%, and this means your monthly payments will be higher. Talk about throwing money away.
  • These loans come with a much shorter payback period than other options, further increasing your monthly payments.
  • You’ll find that your borrowing power is massively limited and there’s a good chance that you’ll struggle to get approved for the money you need to finance your project without reducing the scope. You see, unsecured loans aren’t secured against your home, meaning that they pose a greater risk to lenders.

To compensate for this, borrowing decisions and the loan amount that you’re eligible for is based on your credit score, your income, and any other debts that you’ve got.

You might have seen an advertisement for a $100k home improvement loan, but the chance that you’ll actually be approved for this much at a rate that’s affordable is slim. The best rates and the highest loan amounts are usually only achievable by a very small number of applicants who meet very specific criteria.

  • The interest on a personal loan isn’t tax-deductible, unlike on a RenoFi Loan or other secured alternative (so long as the funds are used to make major improvements to your home).

However, there is one exception. And that’s when you’re looking to borrow a smaller amount of money when, in this case, using a personal loan (or a credit card) is usually going to be the best option.

RenoFi Loans, as an example, start from $20k. If your outdoor kitchen is only going to cost $10k and you’re not looking to combine this with a larger backyard makeover, take the time to shop around for the best interest rates on a personal home improvement loan. Use sites such as Bankrate or Nerdwallet to compare your options based on your credit history and income and see personalized loan recommendations.


Cash is always going to be the cheapest way to pay for any home improvement project, but most homeowners aren’t lucky enough to be in a position where they can afford most renovations or additions without borrowing money.

This means that cash is often taken from emergency funds, retirement accounts, or borrowed from friends and family.

None of these situations are ideal, and when RenoFi Loans let you borrow the money you need and make affordable monthly payments, it makes sense to stop and consider whether those emergency funds should be kept aside in case they’re needed, and not depleted to pay for the construction of an outdoor kitchen.

We’re all for transforming your house into your forever home, just consider the best way to finance your projects first.

What’s the Best Way to Pay for Your Outdoor Kitchen?

For most homeowners, a RenoFi Loan is a great way to pay for an outdoor kitchen or larger backyard makeover.

But it’s important to carefully consider the different options that are available to you and make your decisions based on your own circumstances.

That means you need to be thinking about things like:

  • What’s the scope of your outdoor kitchen and what’s it going to cost you?
  • How much money do you need to borrow without reducing this scope?
  • How much equity do you have in your home?
  • What’s your credit score and credit history?
  • Do you have any other debt on other loans and credit cards?
  • What is the maximum monthly payment you can afford?
  • How long do you want to repay the loan over?

Think carefully about the different options available to you and understand the pros and cons of each. What’s right for one homeowner isn’t necessarily going to be right for another.

Why not chat with one of our advisors to see whether a RenoFi Loan is the right choice for you?

The most money and lowest monthly payment for your renovation

Borrow up to 90% of your future home value with a RenoFi Renovation Loan


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