Tariffs could increase the price of remodeling or building your home. These low-rate loan options can reduce costs

The cost of renovating or building your home will likely rise due to the U.S.-Canada trade war. 

Canada imposed retaliatory tariffs on some U.S. goods on Sept. 8, 17 days after President Donald Trump's 50% tariff on various Canadian products — including plywood, laminated veneer lumber, fiberboard and Portland cement — went into effect. These products are often used in home renovations, and while the U.S. construction industry is not solely dependent on Canada for them, the tariffs threaten to increase overall building costs, according to the National Association of Home Builders (NAHB). 

This won't be the first time consumers feel the pinch of tariffs, particularly when it comes to construction costs. In 2025, after the first round of tariffs were enacted, builders raised prices by 6.3%, resulting in an average increase of $10,900 per home, according to a NAHB/Wells Fargo Housing Market Index (HMI) analysis published

"Building material tariffs heighten market uncertainty, strain supply chains and increase construction costs," NAHB Chairman Bill Owens said in an email to CNBC Select, adding that the trade organization is "urging the administration to exempt building materials in light of the ongoing housing affordability crisis."

If you're planning to renovate your home this year, there's not much you can do to avoid any price increases due to tariffs. However, you can try to reduce your overall costs by choosing financial products that offer lower rates.  

Financing products backed by the value of your home — such as cash-out refinances, home equity loans and HELOCs — are typically offered at lower rates than non-securitized financing, or options that aren't backed by an asset, like personal loans or credit cards. Additionally, some home loans let you borrow more, if needed, without going through the application and closing process again. 

For example, if you're taking out a second mortgage to finance renovations, consider a home equity line of credit (HELOC) instead of a home equity loan. 

HELOCs offer flexibility in how much you take out. With a HELOC, lenders provide a revolving line of credit that you can pull from for a set period, up to a maximum amount. You can take out as much or as little as you need when you require the funds. Meanwhile, a cash-out refinance, or a home equity loan, offers one lump sum. If a HELOC sounds right for you, these lenders offer lower rates — which may offset some of the increased costs caused by the tariffs. 

For example, Alliant Credit Union offers an introductory rate of 3.99% for the first six months, a perk not all lenders provide. After that intro period, Alliant's rates tend to be below average because it's a not-for-profit credit union, meaning it reinvests profits into products for consumers. To join, deposit $5 into a savings account. Plus, Alliant charges no fees. 

U.S. Bank also offers HELOCs at lower rates. As of Sept. 15, it offers rates as low as 5.95%, nearly a point less than the market average.

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