What's the best way to finance a home renovation in 2026?

Four main options, ranked by typical APR in 2026: (1) HELOC (home equity line of credit) — variable APR 7.5–9.5%, draw as needed, interest-only payment in draw period, secured by home; (2) home equity loan — fixed 7.5–9.0% APR, lump sum, secured; (3) cash-out refinance — 6.5–7.5% APR but resets your full mortgage rate so generally worse than HELOC if your existing rate is sub-6%; (4) personal loan — 11–18% APR, unsecured, fastest funding. For most homeowners with sub-6% existing mortgages, HELOC + 25C/HEEHRA rebate stack is the cheapest path. Avoid contractor-financed 0% promo offers unless you can pay off the principal before the promo period — back-end interest is brutal.