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? 

Financing options include home equity loans, HELOCs, and personal loans. Which is best for you will depend on your personal situation.

In this guide:

• Best deck financing options
• Other ways to finance a deck and patio installation
• Costs of building a deck

Best deck financing options

You’ll need to secure financing before starting work on your new deck. The best financing options include home equity loans, home equity lines of credit (HELOCs), and personal loans.

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. 

A home equity loan is a good option if you already know how much your deck installation will cost.

An example of a home equity loan lender: Spring EQ

View Rates

Loan amounts

$20,000 – $500,000

Loan terms

5 – 30 years

Rates (APR)

As low as 5.205%

Spring EQ prides itself on providing a streamlined digital lending experience. Borrowers must have a minimum 640 FICO credit score and can receive funding within two to three weeks without mounds of paperwork.

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. 

An example of a HELOC lender: Figure

View Rates

Loan amounts

$15,000 – $150,000

Loan terms

5, 10, 15, or 30 years

Rates (APR)

3.49% – 13.25%

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.

Personal loans

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.

Here are two personal loan lenders for home improvement:

LightStream

View Rates

Loan amounts

$5,000 – $100,000

Loan terms

24 – 144 months^**

Rates (APR)

4.99% – 16.99%^* with AutoPay

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

Upgrade

View Rates

Loan amounts

$1,000 – $35,000

Loan terms

36 or 60 months

Rates (APR)

7.99% – 35.97%

Upgrade is a solid option for borrowers with fair to bad credit, as well as those that need smaller loans to finance home improvement projects like building a deck. You are able to check rates without impacting your credit score and eligibility is based more on free cash flow as compared to other lenders.

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.

Costs of Building 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. 

Recap of deck financing options

If you’ve decided to finance your new deck or patio, here is a recap of the lenders mentioned above:

^*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

^**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.