The most money and lowest monthly payment for your renovation

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


If you need more space, a better home layout, or a total update - it can be hard to decide whether you should move or renovate your space.

Both of these options have different pros and cons, and there are lots to consider, from the neighborhood, to the home market, to renovation costs, and more.

Would you prefer to upgrade your current home, or put a down payment on a new one? In this article, we’ll cover the pros and cons of selling vs. renovating your home, by comparing a real home in a real scenario to see which is more expensive.

Considerations to Renovate or Move

The average home remodeling cost varies depending on how much work you are getting done.

Consider the pros and cons of your current neighborhood to see if it’s worth investing your money there (rather than taking a chance on somewhere brand new).

Also, look at current market conditions and seasonal house selling trends of your specific area.

Before deciding whether or not to renovate or move, ask yourself these questions:

What is my current mortgage situation like?
How much money do I have in savings?
Do I have enough saved for the out-of-pocket expenses associated with moving?
Do I have emotional ties to your home, and would I feel ready to say goodbye? These emotions may add to your stressors of moving.
Is the timing right?
Do I still need to save money for college tuition or other finances?
Have I found a cheaper mortgage/good sales opportunity in a new location that I want to jump on?

Consider your current financial situation, including your home insurance. Consider whether you would prefer to upgrade your current home or put a down payment on a new one.

Many people don’t quite grasp just how expensive it can be to sell and buy a new house. Seller-paid commissions are usually 5-6%. This does not include repairs, cleaning, staging, moving, etc.

Then you have commissions and other costs for buying a new place. In other words, you will need to spend (X% - around 10%) of your home’s value just to move. If you could renovate, that 10% could be added to your existing home.

How Much Does it Cost to Sell vs. Renovate?

While it truly depends on what you need in your home, how much you’re looking to expand, and the neighborhood you live in, it might be helpful to check out a real-life example of renovating your home vs. selling.

Let’s take a look at Mike and Katie, who live in Pennsylvania.

(This is a hypothetical example loosely based on a real couple that used a RenoFi Loan to renovate their home.)

Mike and Katie are deciding whether to sell or renovate

They chose to renovate their home using a RenoFi Loan - so we’ll walk you through those costs, but we’ll also show how much they would have spent if they had purchased a newer home in the neighborhood instead.

Cost of SellingCost of Renovating
Home cost: +$90,000 (profits from selling)Loan costs: -$800 (as-completed appraisal)
Realtor cost: -$33,000Renovation costs: $0 (covered by RenoFi Loan)
Furniture and repair costs: -$12,000
Closing costs: -$36,000
Moving costs: -$1,400
Total: +$7,600 (+ $640,000 in mortgage debt - which will total $969,000 over the total payback period of the loan, including interest.)Total: -$800 (+$513,000 in total mortgage debt: primary mortgage + home equity loan, which will total ~$679,000, including interest from both loans over time.)

Here’s the full breakdown and explanation below:

Cost of Purchasing a Home

There are a lot of hidden costs involved with selling and purchasing a home. Let’s break down those costs in Katie and Mike’s example and see how much they’d be spending on the entire process.

The home itself

Unfortunately, if Katie and Mike wanted to move somewhere in their neighborhood - they wouldn’t be able to. There are no homes for sale in their neighborhood right now that are relatively the same size and recently updated.

However, if we expand their search to nearby areas, we see a similar home to theirs (same number of bedrooms, bathrooms, and approximate same square footage) that was built in 2002 - so it’s a bit more modern.

While it wasn’t renovated in the last three years, let’s assume that if Katie and Mike moved in, they wouldn’t need to do any major renovations - just some minor repairs/changes.

The home cost? $800,000

If they were to put down 20% of $800,000, that would be $160,000.

Let’s say Mike and Katie still have a mortgage balance of $300,000 on the home that they are selling, which they purchased for $450,000 and is now worth $550,000.

Mike and Katie will use the profits from selling their home to pay off their mortgage, leaving them with $250,000, the down payment on their new home, leaving them with $90,000, and all the other fees below.

Home cost: +$90,000 (Profits from selling)


Generally, realtors make a 6% commission on selling a home. 6% of Mike and Katie’s home selling price would be $33,000.

Realtor cost: -$33,000

Cleaning/Minor repairs + maintenance

When selling a home, it’s important to make any minor repairs and tidy up for house showings. Most folks also want to make some changes to their new home when they move in.

Let’s say Mike and Katie need to replace a toilet and repaint the outside of their home. When they move, they’d like to repaint the home’s interior and purchase some new furniture.

Minor repairs/furniture cost: -$12,000

Closing costs

Closing costs on buying a new home are roughly 3-6% of the home’s total cost. 

Closing costs: -$36,000

Moving costs

The average cost to move a full home of furniture and stuff is $800 to $2,000. 

Moving costs: -$1,400

Total: +$7,600 (+ $640,000 in mortgage debt - which will total $969,000 over the total payback period of the loan, including interest.) 

Because the real estate market is hot, and their home appreciated in value - this is a pretty good deal. Mike and Katie will probably use this extra cash to make more repairs on their new home in the coming years - as the home they purchased isn’t exactly what they’d pictured. 

However, $7,600 isn’t nearly enough to do any major remodeling - so the home won’t fit their exact personal style, but it will still be a great improvement from their current home.

Cost of Renovating a Home

In real life, Mike and Katie decided to renovate their current home - so they could get exactly what they were looking for in terms of layout and design.

Just like selling a home, there are lots of hidden costs involved in renovating a home as well - which depend on your exact project and home location. Let’s break down those costs in Katie and Mike’s example and see how much they’d be spending on the renovation process. 

Loan costs

Mike and Katie decided to take out a RenoFi Home Equity Loan to pay for their home renovation. Their total loan amount (and renovation cost) was $198,000 - and they have an interest rate of less than 4.25%.

Their RenoFi Loan did not require any sort of down payment, but they did have to pay for the “as-completed” appraisal, which is part of the loan application process and required to determine the home’s after renovation value.

Loan costs: -$800

Renovation costs

Mike and Katie’s renovation project included a new mudroom, new siding, a totally new kitchen, new floors, new garage door, and even knocking a wall down to open up the space. (Check out the total transformation and cost breakdown here!).

The renovation costs totaled $199,000 - which was pretty much covered by their RenoFi Loan.

Total costs: -$800 (+$513,000 in total mortgage debt: primary mortgage + home equity loan, which will total ~$679,000, including interest from both loans over time.)

It’s also important to note that Mike and Katie’s renovation project increased their home’s value to $755,000 - so when they sell down the line, they’ll be able to turn quite a profit.

So - which was better?

Mike and Katie say they would choose to renovate rather than buy, for two reasons.

  1. Same location: They live in a cul de sac where they’re close to friends and family, and there weren’t any newer houses remotely close to their neighborhood. They’d have to relocate to a nearby neighborhood in a different school district to get close to what they were looking for with a new house.
  2. Personalization: Mike and Katie had specific ideas for the look and feel of their home - and wanted to be able to make that come to life. While a newer house would have provided updated appliances and a refreshed aesthetic, they’d still want to make smaller changes to fit their style and it wouldn’t be exactly what they wanted.

However, when you look at the cost breakdown, it’s a relatively similar outcome either way.

Pros & Cons of Relocating

Let’s break down the pros and cons of moving, rather than renovating, that Katie and Mike considered before they made a decision.

Benefits of Moving

Let’s break down the pros and cons of moving, rather than renovating, that Katie and Mike considered before they made a decision.

  • Mentally: Avoiding dealing with renovations - not feeling like you’re in a “construction zone.” A fresh start can also be good for mental well-being.
  • Financially: Buying a new investment, building equity, and improving your investment portfolio. And, if you are looking to downsize, you can get in better financial shape and alleviate outstanding debts.
  • Timing: If your home is now worth more than you owe, you may want to sell. Make sure you have enough home equity built up to cover your closing costs and make your down payment.

Because of the housing market - Mike and Katie were looking at inflated and expensive home prices, and not many options. However, they would also have been able to sell their home for more than they thought, without making any major updates.

Cons & Costs of Moving

  • Risks of the “grass not being greener on the other side.”
  • Accounting for the time it takes for you to get an offer.
  • It’s not going to be easy to find a new home that meets all of your wants and needs.
  • All the added costs associated with moving.
  • Need to get acclimated to a new neighborhood.

While Mike and Katie had potential options of homes in nearby neighborhoods that were slightly more modern - the pickings were slim. There were only a few houses on Zillow, and none of them were quite right.

Pros & Cons of Renovating

Renovation Benefits

  • You can customize your existing space to better suit your needs. If you have a specific vision, you’ll be able to see it through. Make your dream space into your own reality. Plus, you’ll save time and energy finding a new home that perfectly matches all of your criteria.
  • You can increase the value of your home and resale value once it’s time to sell.
  • Saving money on moving costs.

Mike and Katie really enjoyed the process of designing a new space in their current home - rather than wasting time and energy on finding a new home that just wasn’t perfect in a crazy real estate market.

They also knew that the money they were putting into the renovation had the potential to increase their home’s value - whereas any money put toward moving fees felt like a waste.

Renovation Costs and Cons

  • Hiring labor (general contractor, plumber, electrician) and living in a construction zone for several weeks depending on the size of your home improvement project.

    • Delays are also possible depending on the availability of materials.
    • Keep in mind that “hidden costs” can also get you. For example, needing to repair pest damage or moving a plumbing line. Plan to set aside more money than the initial quote and choose a trusted contractor who will get the work done in time.
    • You may need to board pets, eat takeout, get a hotel room, or share rooms with family members during the remodel.
  • Costs more money upfront. Increased financing costs, taxes, insurance, and building permit costs (you’ll need permits for any structural, plumbing, or electrical changes).

    • When you do a project that requires a permit, you may need to submit architectural plans to the city, which is an additional cost.
    • Refinancing or taking out a home equity loan will help you stay on top of all these up-front costs.

For some homeowners, the stress of applying for a loan, planning a renovation and living in a construction zone for a short period of time is not worth the added satisfaction of being able to stay in the same location without moving.

Also, if you’re not as particular about your home’s layout or design - you might find it a lot easier to choose a home that’s move-in ready vs. redesigning your own.

The Bottom Line

According to Zillow research, 76% surveyed would rather upgrade a home they already know they like, rather than risking the money on a down payment for an entirely new home - and Mike and Katie agreed.

While for Mike and Katie, the financial cost was relatively similar - it may be different for you based on your financial situation and location. It’s important to dive into your numbers and options before making a decision for yourself.

Take The Quiz: Is it the Right Time for You to Move?

Find a Lender