Deck Financing: How to Pay for Your New Deck or Patio

You may want to add a deck to your home to expand your living space, increase property value, or provide your family with years of outdoor enjoyment and entertainment. You know why you want a deck, but do you know how you’re going to pay for it? 

The cost of building a deck can vary greatly, so you should know all your financing options. This guide will help you figure out which deck financing option is right for you and your budget.

In this review:

• How much does it cost to build a deck?
• Three methods of deck financing
• Other ways to finance a deck and patio installation

How much does it cost to build a deck?

According to Home Guide, homeowners can expect to spend:

• $2,200 for a 10-by-10-foot deck
• $6,160 for a 14-by-20-foot deck
• $8,800 for a 20-by-20-foot deck

The biggest factors in price are materials, labor, deck size, and location. Labor will be the bulk of the bill at $8 to $22 per square foot, while the quality of materials you choose will determine how pricy your deck ends up being. 

Basic materials—pressure treated wood or vinyl—cost around $15 per square foot, while premium materials—composite decking or hardwood—are often $30 or more per square foot, according to local services broker site Thumbtack. Then there are stain, footings, railings, stairs, posts, or benches to factor in. 

And don’t forget to include other fees such as homeowners association fees, insurance, permits, and property taxes. An online deck cost estimator can help you determine a ballpark budget.

Aside from choosing less expensive materials, you might find that you can lower costs if you build the deck yourself.

How much does it cost to build a deck yourself?

The labor from a deck installation contractor will account for about two-thirds of your total cost, Thumbtack reports. You could save a significant amount of money by doing it yourself. All you’ll pay for are materials and any insurance or fees.

Homeowners have reported installing a deck for less than $900. But what you save on cost, you’ll spend on time. Expect building your own deck to take twice as long as hiring a contractor. Larger decks will take even longer.

Also, a DIY approach is not for the inexperienced; it’s only worth it if you know what you’re doing. If not, you could end up with a safety hazard or a slanted porch that will eventually cost you more to get fixed. 

Three methods of deck financing

You’ll need to secure financing before starting work on your new deck. The top financing options for home renovations are:

• A home equity loan
• A home equity line of credit (HELOC)
• A personal loan

Home equity loan

A home equity loan allows you to borrow against your home’s available equity—its value minus the mortgage debt—with a fixed-interest loan that you pay back over time. 

It has relatively low interest rates, provides a lump sum of cash upon closing, and usually has tax-deductible interest. It can be risky, though, because you put your home up as collateral in case you can’t repay the loan. 

>> Read more: How to Calculate Your Home Equity

A home equity loan is a good option if you already know how much your deck installation will cost. Here are our two highest rated home equity loan lenders:

TD Bank

TD Bank is among the top 10 largest banks in the country and operates about 1,250 locations throughout the eastern U.S. It offers flexible home equity loans and lines of credit, secured and unsecured personal loans, mortgages, credit cards, and other banking services. 

You can learn more about TD Bank personal loans here.

Here’s what you need to know about TD Bank’s home equity loans:

• LendEDU rating: 5.00 / 5.00
• Loan amounts: tdbank-homeeq-153-amountlow to tdbank-homeeq-153-amounthigh
• Loan terms: tdbank-homeeq-153-termrange
• APRs: tdbank-homeeq-153-alllow to tdbank-homeeq-153-allhigh
• Fees: tdbank-homeeq-153-origfee

Spring EQ

The Philadelphia-based non-bank lender prides itself on providing a streamlined digital lending experience. Spring EQ borrowers must have a minimum 640 FICO credit score and can receive funding within two to three weeks without mounds of paperwork.

• LendEDU rating: 4.72 / 5.00
• Loan amounts: springeq-homeeq-154-amountlow to springeq-homeeq-154-amounthigh
• Loan terms: springeq-homeeq-154-termrange
• APRs: springeq-homeeq-154-introperiodapr at springeq-homeeq-154-introapr
• Origination fee: springeq-homeeq-154-origfee

Full review: Spring EQ Home Equity Review

Home equity line of credit (HELOC)

A HELOC is like a cross between a home equity loan and a credit card. You borrow against your home’s equity with a revolving line of credit. You make minimum monthly payments, usually interest only at first, and withdraw funds as needed.

This works well for an ongoing project or if you’re uncertain about the overall cost of a deck installation. For example, will your new deck lead to a fence financing need as well?

The downside compared with a home equity loan is it may have higher rates and your budget might be limited depending on the amount of equity you have. 

Here are our two highest rated lenders for home equity lines of credit:

M&T Bank CHOICEquity

M&T Bank has operated for more than 160 years and has locations in New York, New Jersey, Connecticut, Pennsylvania, Maryland, Delaware, Virginia, West Virginia, and Washington, DC. 

It offers everything from investments and personal loans to mortgages and credit cards. You can learn more about M&T Bank personal loans here.

Here’s what you need to know about the bank’s home equity line of credit, CHOICEquity:

• LendEDU rating: 5.00 / 5.00
• Loan amounts:  mtbank-homeeq-603-amountlow to mtbank-homeeq-603-amounthigh
• Loan terms: Up to mtbank-homeeq-603-termlengthhigh_y
• APRs: mtbank-homeeq-603-alllow to mtbank-homeeq-603-allhigh
• Fees: mtbank-homeeq-603-annualfee annual fee, mtbank-homeeq-603-applicfee application fee, and mtbank-homeeq-603-closingcost closing cost fee. 

Figure

Founded in 2018, Figure’s all-digital platform focuses on HELOCs and mortgage financing. Borrowers can get approved in five minutes and receive funds within five days.

• LendEDU rating: 4.56 / 5.00
• Loan amounts: figure-homeeq-600-amountlow to figure-homeeq-600-amounthigh
• Loan terms: figure-homeeq-600-termlengthrange_y
• APRs: figure-homeeq-600-alllow to figure-homeeq-600-allhigh
• Fees: figure-homeeq-600-origfee origination fee and figure-homeeq-600-prepayfee prepayment penalty

Full review: Figure Home Equity Line of Credit Review

Personal loan

A personal loan might be better suited for you if your deck project is inexpensive or if you haven’t built up enough equity in your home yet—or if you simply don’t want to put your home on the line.

You can easily apply online and get funding the same day you’re approved in some cases. Just know that personal loans might have higher interest rates than home-equity backed financing, especially if you have a lower credit score.

>> Read more: Is Financing Landscaping with a Personal Loan a Good Idea?

Here are our two highest-rated personal loan lenders for home improvement:

LightStream

LightStream operates as the online consumer lending division of SunTrust Bank. It’s a top-rated lender for those with good credit. It’s so confident about its loan process that it offers a $100 guarantee that your experience will be the best ever.

• LendEDU rating: 5.00 / 5.00
• Loan amounts: lightstream-perl-43-amountlow to lightstream-perl-43-amounthigh
• Loan terms: lightstream-perl-43-termlengthrange_m
• APRs: lightstream-perl-43-alllow to lightstream-perl-43-allhigh
• Fees: lightstream-perl-43-annualfee annual fee, lightstream-perl-43-applicfee application fee, lightstream-perl-43-origfee origination fee, lightstream-perl-43-prepayfee prepayment penalties, lightstream-perl-43-latefee late fee, lightstream-perl-43-monthlyfee monthly fee, and lightstream-perl-43-adminfee administration fee

Full review: LightStream Personal Loan Review

Marcus

Marcus is an online bank by the New York-based financial firm Goldman Sachs. It offers no-fee, fixed-rate personal loans, high-yield savings accounts, and CDs. It’s a top-rated lender for borrowers with fair credit.

>> Read more: Best Home Improvement Loans for Bad Credit 

• LendEDU rating: 5.00 / 5.00
• Loan amounts: marcus-perl-56-amountlow to marcus-perl-56-amounthigh
• Loan terms: marcus-perl-56-termlengthrange_m
• APRs: marcus-perl-56-alllow to marcus-perl-56-allhigh 
• Fees: marcus-perl-56-origfee origination fee, marcus-perl-56-prepayfee prepayment penalties, marcus-perl-56-latefee late fee, and marcus-perl-56-applicfee application fee

Full review: Marcus Personal Loans Review

Other ways to finance a deck and patio installation

If you don’t want to leverage your equity or take out a personal loan, you have other options, including financing through your deck builder or using a credit card. 

Builder financing

Your building contractor may offer financing that could be a good fall-back option if you have trouble sourcing your own financing. This one-stop method is convenient, but it relies heavily on the integrity of your contractor, so make sure they are someone you’ve vetted and trust. 

Typically, your contractor will use a third-party lender they’ve partnered with. In some cases, you can get an interest-free loan if you pay it off early enough.

Before choosing builder financing, you should compare your contractor’s fees and rates with other deck financing options to ensure you’re getting a reasonable deal.

Credit cards

Only use a credit card to finance your home improvement project as a last resort. Credit cards have notoriously high interest rates, and credit card debt is a clear red flag to the credit bureaus that generate your credit score.

However, using a credit card can be beneficial if you take advantage of a promotional 0% APR or sign-up bonus. 

Promotional credit card offers are a good deal if your overall budget is low and you can pay off the balance before the introductory period ends to avoid owing retroactive interest.

>> Read more: Hot Tub Financing: Compare Your Options