How to finance a roof replacement

A re-roof is the textbook unplanned home repair: it fails without warning, it cannot be deferred, and the contractors quoting it know you have no leverage. No agency publishes a roof price series, so this guide works from what is published instead: the Statistics Canada cost index for the inputs, and the Freddie Mac average mortgage rates that secured borrowing is priced against. The route you pick can add hundreds, or several thousand, dollars of interest over the life of the loan. The lowest rates are only available to the most qualified applicants.

Source: Statistics Canada table 326-0020, monthly, not seasonally adjusted. Read these as indexes rather than prices: an index tracks how a category's cost has moved, not what the work itself costs.

The published cost context for roofing

There is no official roof price series, but the cost of the work tracks materials and energy, and those have published indexes. Statistics Canada publishes the series below at national and provincial level, which is the only official sub-national construction price data available in either country.

Source: Freddie Mac Primary Mortgage Market Survey, published at freddiemac.com/pmms. These are national averages for conforming loans. What you are quoted depends on your credit profile, points paid, loan amount and property.

Secured borrowing is priced off mortgage rates

With equity in hand, a secured product usually costs less than an unsecured one, because the lender can recover its money from the property. That is a fact about pricing, not a recommendation: secured debt puts the home on the line if repayment stops. Freddie Mac publishes the national average mortgage rates that these products are benchmarked against.

Four ways to finance the job

**Contractor financing.** Easy, arranged on the spot, and generally the costliest per dollar. The finance company pays the contractor a fee, and that fee is folded into your rate. Always ask for the cash price.

**A home equity loan or line of credit.** The cheapest per dollar when you have equity and qualify, since it is secured. Closing costs can apply, and default hands the lender the home.

**A personal loan.** Unsecured, quick, fixed term. It costs more than secured borrowing and usually less than contractor financing.

**A credit card.** By a wide margin the priciest route, unless the balance clears inside a promotional window. At most, use it for the deposit.

• Collect three written quotes that break out tear-off, disposal, underlayment, flashing and permits as separate lines.
• Ask every contractor for both the cash price and the financed price, because the two are not the same.
• Confirm who holds the warranty, and whether it transfers if the house is sold.
• Verify the contractor's licence and insurance in your state or province.

Making roof quotes comparable

Quotes are hard to compare on purpose, because each contractor itemises a different set of things. Demand the same eight lines from everyone: square footage, existing layer count and removal, underlayment product, flashing replacement, ventilation, decking replacement priced per sheet, permit handling, and disposal method. A quote missing three of those is not cheaper, it is incomplete, and the omitted work returns as a change order the moment the roof is stripped.

The per-sheet decking price is the most valuable line to insist on. Rotten decking is the standard surprise on a re-roof and the item most often marked up. Put the unit price in the contract.

The home improvement financing trap

Nearly every complaint in this category traces to one of two contract structures. The first is a contractor who arranges the loan and is paid off immediately, leaving you owing the finance company from day one even if the work stalls. The second is a mechanics lien: in many jurisdictions an unpaid subcontractor or supplier can file against your property even after you have paid the general contractor in full.

Both are handled the same way. Get a signed lien waiver, or its local equivalent, from each subcontractor and supplier at every payment stage, and tie payments to finished stages rather than calendar dates. A third down with the balance on completion is standard; paying in full upfront is not.

Insurance, and the order of operations

When storm, hail or a fallen tree caused the damage, the insurer's adjuster defines the scope and the contractor prices to it. Signing a contract before filing the claim hands scope control to the contractor and can shrink the payout. File first, obtain the scope in writing, then solicit quotes against it.

A roof that has simply worn out is covered by no policy, so the entire cost is yours. That is the scenario where the financing comparison above decides whether interest adds a few hundred dollars or several thousand to the job.

Three costly mistakes

**Paying a deposit before the scope is fixed.** A deposit against an undefined scope buys nothing and leaves you exposed if the numbers move. Lock the scope first, then pay.

**Choosing on price alone.** The cheapest bid is often the one with the most exclusions, and those exclusions surface only after the old roof is gone. Compare scopes first, then prices.

**Financing on the contractor's terms without a cash price to compare.** Request both prices in writing. A contractor who refuses to quote a cash price has told you something.

What moves the price

Roof area and pitch, how many layers must come off, the material selected, whether decking needs replacement, and site access. A quote that omits these cannot be compared with one that lists them.

Insurance does cover some of this: storm, hail and fallen-tree damage are usually included. File the claim before signing a contract, since the insurer's adjuster controls the scope.

Sources for every figure on this page

Related reading

• Roofing costs by state and province
• Loan payment calculator
• Total cost of ownership calculator