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How to Pay for a New Roof: Credit, Loans, and More

Discover your options for paying for a new roof. Cash, credit cards, personal loans, home equity loans, HELOCs, and cash-out refinancing, with their pros and cons.
Last updated June 14th, 2024

There’s a reason your home is often referred to as “a roof over your head.”

Your roof is a defining detail of your home. It’s a large part of your home’s value, factored into your homeowners’ insurance rates—and what keeps all your stuff out of the rain. 

The National Association of REALTORS® Research Group is high on roofs. In their 2022 Remodeling Impact Report, they suggest that roofing projects give 100% Cost Recovery—in other words, homeowners can recover up to 100% of the cost of their roofing projects when they sell their homes.

Paying for a new roof: your options

Financing Pros Cons
  • Cheaper long-term (no interest)
  • Simple and fast
  • Possible discounts from contractors 
  • Reduces your liquidity
  • Not feasible for everyone
Credit card
  • Ease of use
  • Deals such as 0% interest
  • Potential for rewards
  • High interest rates outside of introductory periods
Personal loans
  • Flexible and fast
  • Cheaper than credit cards
  • More expensive than secured loans
Direct-from-contractor loans
  • Fast and easy
  • Guaranteed to cover the cost of the roof
  • Not always available
  • Rates and terms vary significantly
Home equity loans
  • Lower interest rates
  • Can use money toward anything
  • Must own significant equity to qualify
  • May lose home if payments aren’t made
  • Results in a second mortgage
  • Lower interest rates
  • Flexible credit line
  • Can use money toward anything
  • Must own significant equity to qualify
  • May lose home if payments aren’t made
  • Results in a second mortgage
Cash-out refinancing
  • Lower interest rates
  • Flexible payout
  • Only a single monthly mortgage payment
  • Must own significant equity to qualify
  • May lose home if payments aren’t made

Category one: cash and credit

Cash and credit are the fastest, easiest payment options. They’re also the simplest to understand—if you can swing it. But while a minor repair might have you reaching for your wallet, you may find it difficult to pay for an entire roof with cash-at-hand. 


According to Architectural Digest, a new roof costs, on average, between $5,700 and $12,500

Do you have that much cash at your fingertips? Probably not: Roughly 38% of Americans have $100 or less in their checking accounts.

But if you’ve saved it up, cash has its advantages. You own that new roof outright. No interest rates, due dates, or late fees. Cash is also convenient for the payee, so some roofing companies may even offer you a discount for paying in cash.

The downside: If an emergency or other major purchase comes along, you have considerably less liquidity to address it. You’ll have to start saving all over again.

  • Pros: Cheaper long-term, simple and fast, with a possible discount from the contractor.
  • Cons: Reduces your liquidity, not feasible for everyone.

Credit card

With a strong credit score, you can find a card with a 0% introductory APR for the first year or two—or maybe you already have a low-interest credit card open with enough of a credit line to swing the transaction,

If you’re confident that you can pay off the full cost of the new roof within the introductory period, it becomes an interest-free loan. In addition, many credit cards offer perks for using them, like airline miles or cashback points. A major purchase like a new roof could have you raking those in like a champ.

But if you’re relying on a 0% APR card, be aware that if you don’t pay off the bill in time, the honeymoon ends abruptly. You could find yourself paying an average interest rate of around 28% on the total balance—not just the balance remaining. Suddenly, it no longer resembles an interest-free loan. And all the airline miles in the world won’t make up for the financial burden.

  • Pros: Ease of use, low initial interest rate, potential for rewards.
  • Cons: High interest rates outside of an introductory period.

Category two: Personal and contractor loans

Cash and credit cards are easy, but not always feasible. Personal loans and contractor loans are both a little more complicated, but also more popular. Mike McGinley of Acorn Finance will help talk us through it.

Personal loans

McGinley tells us personal loans “tend to cap out around $40,000,” but you can find one for whatever amount you need within that range. And they’re fast. A homeowner could get pre-qualified same-day and “get that money in their bank account within a day or two,” McGinley says. This is great if your roof replacement is urgent (like unexpected space junk damage—it happens!), and you don’t have time for a lengthy application process.

A personal loan generally has a fixed rate, so your payments won’t be tossed up and down by market fluctuations. Most personal loans are unsecured, although some might be secured by the value of collateral (such as a vehicle). But the good news is that you won’t lose your home if things go sideways and you can’t make your payments. (The bad news is that interest rates are higher for unsecured loans than secured loans: around 10 to 20%, depending on your credit).

  • Pros: Flexible and fast, cheaper than credit cards.
  • Cons: More expensive than secured loans.

Direct-from-contractor loans

Some roofing companies offer their own financing options. They may even offer you 0% financing for the introductory period.

But contractors aren’t banks. How do they do this?

McGinley explains: “If that company wants to offer financing to the consumer… [they will] work directly with a bank and get underwritten by that bank.” These offers are essentially bank-backed personal loans that are branded with the contractor’s name. 

Is there an advantage to financing through a contractor? Possibly!

Roofers have to fulfill requirements like “you have to do X amount of sales every year, you have to have been in business for four or five years, you can’t have any liens of judgment against your company,” McGinley says. So, you know you’re working with a credentialed roofer if they’re able to give you a loan. Their financing options may also be attractive, and they may give you a financing deal through them.

  • Pros: Fast and easy, guaranteed to cover the cost of your roof.
  • Cons: Not every contractor provides loans, rates and terms may vary significantly. 

Category three: equity leverage

Pay a mortgage long enough, and you’ll build up equity. Equity is the amount of your home’s value that you actually own: its current market value minus your remaining mortgage debt. So, if you purchased your home at $250,000 and it’s currently worth $400,000, you have accrued at least $150,000 in equity even before calculating your mortgage payments.

That equity is money that you can tap to fund your new roof. Let’s explore three ways: home equity loans, home equity lines of credit (HELOCs), and cash-out refinancing. 

These options are all secured by your home in a way personal loans are not. This lets lenders offer, per McGinley, a “higher amount, better rates.” You get access to more money—and the interest rates tend to be lower, usually under 10%. (The downside is that you could lose your home if you can’t keep up with payments. And that’s a scary prospect.)

Given that a new roof is usually well within the amount you could get from a personal loan, some homeowners would rather have an unsecured loan. After all, what good is a new roof on a house you’ve lost? But if those options aren’t available—or you’re confident in your ability to make your payments—equity leverage could be the right option for you.

One more thing: All three of these options are essentially mortgages, with fees, costs, and closing terms. They also have similar requirements for the borrower: You don’t want to lose your home, and the bank doesn’t want you to lose your home, either. You’ll need to own a minimum percentage of your home as equity (usually around 20%), and you can only borrow up to a percentage of that (85% is pretty common). McGinley notes, “Generally, [lenders] think about those things pretty similarly. … They all represent pretty similar-type risk.”

Home equity loans

This is a lump-sum loan amount that’s directly tied to your home’s equity. Say you have $200,000 worth of equity, (the average from summer of 2023). A home equity loan allowing you to borrow up to 85% of that could get you a lump sum of up to $170,000 toward your new roof (or anything else). But, of course, now you own less of your home.

You don’t have to borrow the maximum amount allowed. $170,000 is way more than a roof replacement is likely to cost. McGinley mentions that if “you’re living in a big house, and the roof’s gonna cost $130,000 or something crazy, then equity becomes probably a better option because you can get more money.” 

Otherwise, it’s prudent to keep your loan at a size that will cover your anticipated needs—plus maybe some unanticipated costs.

You’ll pay this loan down as a second mortgage payment, separate from the mortgage you’re already paying.

  • Pros: Lower interest rates, can use the money toward anything.
  • Cons: Must own significant equity to qualify, may lose home if payments aren’t made, results in a second mortgage.

Home equity lines of credit (HELOCs)

One major difference between a HELOC and a home equity loan: a line of credit does not arrive as a lump sum. You can borrow what you need from it. And as you pay it back, the amount replenishes over the life of the loan.

It’s almost like using your home as a credit card.

Otherwise, a HELOC is similar to a home equity loan. To use our example from earlier, say you have $200,000 in equity, and you find a HELOC opening up 85% of that as a line of credit. This time, the $170,000 represents money you can tap into — as much or as little as you want — to fund your roof. You only pay back what you borrow (plus interest and fees).

Flexibility has its advantages. If your project ends up costing less than you anticipated, you’re not on the hook for unused funds. And if it’s more expensive, you can borrow up to the agreed-upon limit to cover it.

Heads up: You may encounter a general rule such as: “Home equity loans are fixed-rate interest while HELOCs are variable.” McGinley tells us this isn’t necessarily the case. “You could have variable rates or fixed rates attached to any of these products.” But he does think “the norm” for closed-end installment loans, like home equity loans, tends to be fixed-rate. Explore your financing offers to find terms that fit you.

  • Pros: Lower interest rates, flexible credit line, use the money however you want.
  • Cons: Must own significant equity to qualify, may lose home if payments aren’t made, results in a second mortgage.

Cash-out refinancing

Finally, unlike the home equity loan and the HELOC, cash-out refinancing does not result in an additional mortgage payment. It’s a brand-new mortgage that replaces the one you have.

You negotiate a new mortgage for more than what you currently owe and take the difference in cash. Your payments will now repay that cash and continue to pay for your home.

Let’s revisit that $200,000 worth of equity again. If you find a cash-out refinance that allows you to cash out 85% of your home’s value, you could get up to $170,000 in cash. If you decide you’d like to take $15,000 for a new roof, that money will come to you in cash, and your new mortgage will be for what you still owe on the home plus the extra $15,000. 

Bonus: If you’re currently in a period where interest rates are significantly lower than when you started your mortgage, a cash-out refinance could have the added benefit of lowering your payments and getting you some cash out of the deal.

Tip: The interest on all three of these equity-leveraging options might be tax deductible, “as long as the funds were spent on home improvements or renovations” (for example, hint-hint, your new roof). McGinley warns that the laws are always in flux, and you should find out if this will apply to the rules of the product you’re applying for.

  • Pros: Lower interest rates, flexible payout, only a single payment. 
  • Cons: Must own significant equity to qualify, may lose home if payments aren’t made.

How can Acorn Finance help?

Even in the often stressful world of home improvement, building a new roof can be an intimidating process.

Acorn can streamline your financing by exposing you to a network of high-quality lenders. These lenders compete to offer you funding options at competitive rates. When you find one that fits your needs, a simple application can get you pre-qualified in seconds.

Build a roof over your head on your terms.