About 73% of Canadians are planning a renovation for next year. Since you're reading this article as well, we're going to use our magic genie powers to guess you're one of them.

But budgeting for renovation costs can be a nightmare — hidden fees, unclear pricing, and more. That's why we've put together this guide on estimating renovation costs by room, as well as how to budget and finance them.

We'll cover:

• What goes into your renovation costs
• Average cost of renovations (by room & scope, + ROI)
• Common hidden costs
• Budgeting tips
• How to maximize ROI
• Three tools to estimate renovation costs

P.S.— Are you a homeowner trying to finance your next renovation? You can actually use your property ownership to pay for the upgrade. They're called secured renovation loans, and Lotly works with 50+ lenders nationwide to help you find the best rates for your project. Get a free consultation today to learn more.

What goes into renovation costs

Every renovation is different. Your total budget depends on the size of your space, your location, and more — but generally, your costs will fall into a few main categories:

1. Materials:

• This includes things like flooring, cabinets, countertops, and fixtures.
• Prices can vary widely depending on the type and quality of materials you choose.

2. Labour:

• Hiring professionals to do the work will add significant cost to your renovation.
• Shop around and get quotes from multiple contractors to find the best price.
• Keep in mind that higher quality work may come with a higher price tag.

3. Permits:

• Depending on the scope of your renovation, you may need to obtain permits from your local government.
• These can add additional costs, so budget for them accordingly.
• Check with your contractor or local government to determine your necessary permits and their associated fees.

4. Unexpected expenses:

• Renovations often uncover unexpected issues, such as structural damage or outdated plumbing and wiring.
• Be prepared for these additional costs by setting aside a contingency fund in your budget.
• It's always better to overestimate rather than underestimate your renovation costs.

Average cost of renovation by room type & scope (including ROI)

We'll cover the typical cost for most of the major rooms in your home:

• Bathroom
• Kitchen
• Living room
• Bedroom
• Garage
• Basement

And we'll go into three different levels of renovation:

• Gut renovation: Generally, a total room overhaul, including significant structural changes and replacing all materials.
• Mid-range renovation: An upgrade to existing materials and fixtures, but no major structural changes.
• Cosmetic renovation: Mainly focused on surface-level upgrades like paint, flooring, and minor fixes.

We'll also discuss what general ROIs can look like — keep in mind, these are all average prices and estimates of what you can expect to pay. Your particular quote may look wildly different.

Bathroom renovation cost

Gut renovation: $20,000 - $38,000

• Complete overhaul of fixtures, plumbing, electrical work, custom tile installation, and layout redesign. Costs increase significantly when relocating plumbing. Typically provides around 60-70% ROI.​

Mid-range renovation: $10,000 - $20,000

• Includes replacing flooring, new fixtures, and mid-range finishes like quartz countertops and standard vanities. This level of renovation avoids major plumbing changes. Offers about 65-70% ROI.

Cosmetic update: $5,000 - $10,000

• Simple updates include repainting, new lighting, and replacing a sink or toilet. Prefabricated materials and DIY labour can keep costs down. This can return around 60% of the cost.

Kitchen renovation cost

Gut renovation: $70,000 - $130,000+

• Full redesign with new cabinets, high-end appliances, upgraded countertops (e.g., granite), new plumbing, and electrical. This scope often involves moving walls or changing the layout.​
• ROI typically ranges between 55-70%, as kitchens and kitchen remodels are a key selling point​.

Mid-range renovation: $30,000 - $70,000

• Involves upgrading appliances, cabinets, countertops, and flooring. You might also add a kitchen island or install energy-efficient lighting​.
• Yielding a solid 70-80% ROI​.

Cosmetic update: $10,000 - $30,000

• Focus on surface-level changes, like repainting cabinets, updating the backsplash, replacing hardware, and refreshing light fixtures​.

Living room renovation cost

Gut renovation: $10,000 - $15,000

• May include new flooring, electrical rewiring, built-in shelving, and significant structural changes (e.g., removing walls to create an open layout).
• Fairly strong return at 60-70%.

Mid-range renovation: $5,000 - $10,000

• Involves new flooring, repainting, and installing features like a fireplace. Furniture and lighting upgrades might also be part of this renovation​. ROI is about 65%.

Cosmetic update: $2,500 - $5,000

• Typically limited to painting, updating lighting, and refinishing floors. This is the most budget-friendly approach to a living room update​. Can return up to 55-65% of your investments.

Bedroom renovation cost

Gut renovation: $8,000 - $12,000

• Covers flooring replacement, adding custom closets, new windows, and extensive layout changes. This may include new insulation or electrical work​. Typically provides a 50-60% ROI.

Mid-range renovation: $4,000 - $8,000

• Includes repainting, new flooring, lighting updates, and basic fixture changes like ceiling fans. Built-in shelving or closet upgrades may be included​. ROI can reach up to 60%.

Cosmetic update: $1,500 - $4,000

• Mostly surface-level changes like painting, new carpets, or refinishing hardwood floors. This is an ideal option for a quick bedroom refresh​ and can offer 50-55% ROI.

Garage renovation cost

Gut renovation: $10,000 - $15,000

• Full conversion into a living space, including insulation, drywall, new windows, and HVAC installation.
• Converting the garage into a living space yields about a 50-60% ROI, depending on the local market​.

Mid-range renovation: $5,000 - $10,000

• Renovation might involve installing storage systems, updating the garage door, or adding insulation and better lighting​.
• These upgrades can offer up to 60% ROI, largely thanks to functionality and curb appeal improvements.

Cosmetic update: $2,000 - $5,000

• Simple improvements like a new paint job, basic shelving, or floor sealing​. Minor changes can return up to 50-55% of the investment.

Basement renovation cost

Gut renovation: $25,000 - $50,000

• This includes installing new walls, flooring, a bathroom, and potentially adding windows for natural light. A complete basement renovation often involves plumbing and electrical updates​.
• A full basement conversion into a living space can offer a 50% to 60% ROI.

Mid-range renovation: $10,000 - $25,000

• This scope focuses on finishing the basement with flooring, drywall, and basic lighting. It may also involve adding a bathroom or small kitchenette, with a 65-70% return​.

Cosmetic update: $7,000 - $15,000

• Simple finishing touches like painting, adding carpeting, or basic lighting updates can turn a basement into a functional space at a lower cost.
• Can provide a 50-60% ROI.

Common hidden costs to look out for

• Permits: Depending on the scale of your renovation, you may need to obtain permits from your local government. These can range in price but are often necessary for larger renovations.
• Labour and materials: Get quotes from multiple contractors and factor in the cost of materials when budgeting for your home renovation. Unexpected delays or complications can also add to these costs.
• Old house issues: If you live in an older home, unforeseen issues may arise during a renovation, such as outdated wiring or plumbing. Have a contingency fund for potential surprises like this.
• Temporary living arrangements: If your home is undergoing major renovations, you may need to temporarily move out and find alternative living arrangements. This can add to the overall cost of your renovation.

3 tips for budgeting a renovation

1. Research and plan: Before starting any renovation project, research costs for materials and labour in your area to get an idea of how much you should budget. Planning out the specifics of your renovation can also help prevent unexpected costs.
2. Create a detailed budget: Once you have an idea of the overall cost, create a detailed budget that includes all expected expenses. Make sure to leave room for unexpected costs or changes in plans.
3. Add a contingency fund: As mentioned earlier, unexpected issues may arise during a renovation. It's vital to set aside extra funds for these situations so they don't derail your entire project. Something like a HELOC can be handy for these scenarios.

Home renovations can be costly, but with proper budgeting and planning, you can avoid overspending and ensure a successful project.

How to maximize the ROI of your renovation

• Focus on critical areas: When renovating for resale value, it's a good idea to focus on the areas that will give you the highest return on investment. This includes kitchens, bathrooms, and curb appeal.
• Choose neutral designs: While you may prefer bold colors or unique styles, it's best to stick with neutral designs when renovating for resale. This appeals to a broader range of potential buyers.
• Don't over-improve: It can be tempting to go all out with high-end finishes and top-of-the-line appliances, but remember to consider the market value of your home in comparison. Over-improving can actually decrease your ROI.
• Use your home equity to finance improvements: A major life hack is using your existing home equity to finance renovations. This can save you money on interest rates and increase the value of your home. You can check how much you can get from your home equity here!
• Consider DIY options: Depending on your skill level and the project scope, it may be cost-effective to complete some tasks yourself instead of hiring a professional.

3 tools to help estimate your renovation costs

RenoQuotes Cost Estimator

• An easy-to-use, button-based estimator tool that will help you get estimates in a few clicks.
• Largely follows the structuring of this article, sectioned by room, the scope of renovation, etc. Most of the estimates are for exterior services, but we highly recommend using the kitchen tool. 

BudgetReno Cost Calculator

• This tool estimates costs for kitchens, bathrooms, basements, and flooring projects. It provides three categories of estimates (Affordable, Standard, and Luxury), making it easy to compare different budget options for your renovation.
• It also gives a detailed breakdown of the products included in each estimate.

MyHomeUpgrade.ca Renovation Calculator

• MyHomeUpgrade.ca offers a simple, category-based estimator for renovations. Whether you're looking to renovate your kitchen, basement, or install new windows, this tool provides on-the-spot estimates tailored to your needs.
• It's a versatile option for Canadian homeowners looking to get started with project planning.

Finance your dream renovation with Lotly today

First, some key takeaways:

• Understand the main cost categories of renovations. Your renovation budget will include materials, labour, permits, and unexpected expenses, with labour costs and material quality significantly affecting the total price.
• Know the typical renovation costs and ROI by room type and scope. From gut renovations to cosmetic updates, kitchens and bathrooms offer the highest return on investment, while cosmetic updates are the most budget-friendly.
• Budget wisely and prepare for hidden costs. Create a detailed budget with a contingency fund for unexpected issues like outdated plumbing, and use tools like renovation calculators to estimate expenses accurately.

If you own significant equity in your home, a home equity loan or HELOC might be the right tool to finance your renovation costs. By using the value already invested into your house, you can access a renovation loan without taking out a separate personal loan or paying high credit card interest rates.

Sounds like something up your alley? You're in the right place. Lotly works with 50+ lenders across Canada to help our clients find the best rates on secured renovation loans, tailored for their financial situations. If you want to see if we're the right fit for you, book a free consultation today!

Frequently Asked Questions

What costs the most when renovating a house?

The main cost categories of renovations include materials, labour, permits, and unexpected expenses. labour and material quality can significantly affect the total cost.

What is the budget of renovation?

The budget for a renovation project can vary greatly depending on the scope and type of renovation. Generally, gut renovations cost much more,  while cosmetic updates are more budget-friendly.

How much should I spend on renovations?

Try not to spend more than 5-10% of your home's value on renovations. This is a good rule of thumb to avoid over-improving your property and ending up with a lower return on investment.

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