Plan your kitchen reno budget

After thumbing through endless pages of magazines for ideas on your dream kitchen, you finally stumble upon something you and your bank account can agree on. But before you decide on whether your cabinets should be lacquered board or wood veneer, you should set a budget for your renovation. Like most major renovations, expenses can add up before you know it and usually exceed the amount originally planned. According to the Canadian Mortgage and Housing Corporation (CMHC), the average Canadian spent $11,270 on renovations in 2006.

Here are ways to plan an effective and economic kitchen renovation.

Know Your Budget

Before you set the budget in stone, ask yourself "how long do I plan to stay in my home?" If your answer is more than five years, you should treat the renovation as an investment rather than an expense. According to the Appraisal Institute of Canada, a kitchen renovation produces one of the highest paybacks in terms of value.

Consider a Loan

A kitchen renovation can be one of the most expensive improvements made to your home. One way to make it more affordable is to consider a loan. Not only will it improve your monthly cash flow, but it will also allow you to complete your project in one phase rather than multiple stages. CIBC offers a secured line of credit to would-be renovators for the big endeavor. By using the equity in your home, you will be able to receive a lower interest rate and the flexibility to complete your home renovation.

"Even if you have cash on hand, it is often better to borrow at a low interest rate than pull out money from a high return investment account" says Marcello Aquilina, a CIBC financial advisor.

More information on this topic can be found at your nearest CIBC branch, toll-free at 1-800-465-CIBC (2422) or online at www.cibc.com/ca/loans.