Emergency repairs are a fact of the homeowner’s life. Maintaining an emergency savings account is a good way to handle the unexpected, and of course, there is also homeowner insurance. But if your savings aren’t set aside or if you’re lacking coverage, what? It may make sense to use your home to use your home by renting the fairness of your home to cover repair costs.
With both Home Equity Loans and Line of Credit (HELOCS), you can tap on the stock of your home (the amount of the property you own). In each case, you list your property as collateral for your debt.
Is it worth it? Let’s take a look at the details of using Home Equity to fund emergency home repairs.
Do I need to use my household capital to fund repairs?
If you have a substantial amount of capital in your home and are facing serious five-digit emergency repairs, that equity can help you fund your corrections.
“After a short, mild recession, remodeling market spending is expected to grow again this year, supported by large levels of home equity that will boost homeowners’ trust and encourage greater investment.”
Diluting your homeownership stock – turning what you own into what you owe – is not something you should do lightly. However, 55% of current homeowners think they are considering improving or repairing their home.
How to determine your home equity
Your ability to utilize your household capital to cover the costs of emergency repairs will depend heavily on the amount of stock you have available. Fairness is the difference between your current fair market value and the remaining amount you owe on a mortgage, as well as other loans you may have for your home.
For example, if your home is worth $500,000 and your mortgage balance is $350,000, that means you have $150,000 in household capital. However, this is not all the amount you can actually borrow. Most lenders need to maintain a certain amount of your stock, usually 15-20%.
How to tap Home Equity
Two main types of tools that homeowners can use to fund emergency repairs are Home Equity Loans and HELOCs.
A home equity loan is a lump sum payment usually at a fixed interest rate and is paid back in monthly installments. Home equity line with credit cards like credit cards with interest rate fluctuations. What you borrow is a revolving credit line if necessary. You can repay these withdrawals and borrow money again during the set draw period.
Annual housing emergency spending
Hippo’s latest Housepower Report survey shows that 83% of homeowners who handled unexpected repairs in 2024 are increasing, especially when damage caused by extreme weather becomes more common.
The most common issues reported include water damage. This is 41% non-flow related and 21% flood related. Roof damage, 37%. Window and door problems, 34%. Inflation increases labor and materials costs, “these repairs are provided at sudden costs, with 46% of homeowners spending more than $5,000 out-of-pocket,” says Courtney Klosterman, an expert at Home Insights at Hippo.
According to Angi’s “Home Expense Status in 2024” report, 43% of homeowners report an increase in stress associated with home repairs, and younger homeowners feel it most keenly. Emergency costs vary depending on the homeowner’s age. The younger generation has been allocated more to emergency projects, the report found. Regarding last year’s annual expenditure:
- Gen Z (ages 13-28) spent $1,387
- Millennials (ages 29-44) spent $1,329
- GEX X (ages 45-60) spent $691
- Baby Boomers (ages 61-79) spent $680
- Silent Generation (ages 80-100) spent $94
While some of these numbers seem small, the line between emergency housing spending and housing improvement spending is blurry. The threat of problem – “You’re away from just one big storm…” – often motivates homeowners to carry out major renovations or upgrades. One Bankrate contributor used her home equity stake to do it to stop potential disasters.
Most common emergency home repair costs
Emergency repair costs vary widely depending on the size of your home, the area you live in, the nature of the emergency, and of course the extent of damage. However, some repairs tend to be more expensive than others in all areas and homes. Based on the latest data from Homeadvisor, here is a breakdown of some of the most common emergency home repairs and how much they usually cost.
|
repair |
Cost Range | Average cost |
|---|---|---|
| HVAC | $130 – $2000 | $350 |
| roof | $392 – $1,923 | $1,147 |
| Rewiring | $602 – $2,593 | $1,564 |
| Private road (asphalt) | $1,071 – $4,011 | $2,459 |
| Purification system | $629 – $3,038 | $1,830 |
| Mold Repair/Removal | $1,223 – $3,751 | $2,365 |
| Foundation | $2,218 – $8,110 | $5,163 |
2025 Emergency Savings Statistics
Other home repair financing options
If you need to pay for emergency home repairs and don’t want to take away your home equity loan or HELOC, consider the following options:
- Homeowner Insurance Claim: A homeowner’s insurance claim should be the first line of defense against damage and destruction. However, before filing a claim with your insurance company, please look into your policy to see if the damages are covered, understand that it is deductible and consider the number of claims you have filed in the past. Also, please note that the refund time frame ranges from 30 to 90 days.
- Personal loan: If you don’t have strong credits or many shares in your home, a personal home improvement loan may be a more accessible option. Personal loans tend to be faster and easier than home equity loans, but interest rates are relatively high, especially when credit is insufficient.
- Government-supported mortgages: Some government-supported loans, such as FHA 203(k) loans, VA renovation loans, or USDA Section 504 Home Repair Loans, can assist in both minor repairs or major rehabilitation projects. If you are in an emergency and your home is not habitable, you may not have the luxury of time to get one of these loans, but if the modification is not urgent and you qualify, they can be a viable option.
Final Words on Using Your Home to Fund an Emergency Repair
Unexpected home repair costs can be added quickly. Building an emergency savings fund, keeping your credit in good condition and ensuring you are well insured can help you access your money when you need it the most, says Bankrate Insurance Writer and Authorized Insurance Agent Shannon Martin. Still, she said, “Tapping to out-of-pocket equity may help alleviate what homeowners face during catastrophic losses.”
Home Equity Loans and HELOCs usually come with competitive interest rates and long repayment timelines. These may be the most affordable options for borrowing a substantial amount. But think carefully about the downsides. This type of fundraising will take time and decrease to use your home as collateral and acquire the shares you have built in your home. It also serves as a lien on property. This should be repaid immediately if you sell it.
