Roof financing costs and options

Repairing or replacing your roof is a major home improvement expense and may set you back around $10,000 or more. You could save up for the cost of the roof or your home insurance deductible, but if you need it done sooner rather than later, you may want to consider roof financing options, such as a personal loan, home equity loan or contractor financing.

How much does roof financing cost?

The average cost of a roof is around $10,000, according to statistics compiled by Angi ⁽¹⁾. However, the exact cost depends on the home’s size, the type of roofing materials used, the complexity of the roof, your geographic location and other factors.

On average, expect to pay roughly between $4 to $11 per square foot. For example, a 2,000-square-foot home may cost between $9,000 and $24,000, whereas a 1,200-square-foot house could range from $6,000 to $14,000. Also, consider that costs may vary wildly based on where you live — expect to pay a lot more for a new roof in New York City than you would for a comparably sized roof in rural Iowa, for instance.

Calculate your loan costs for a roof

How much your loan costs depends on the type of loan you get, how much you finance and your eligibility criteria. Fees and interest also vary by lender. But, you can play around with loan terms, rates and loan sizes to get an idea of how much your loan may cost you.

Roof financing options

There are multiple options for a roof loan, and which way you go may depend on whether you need a roof repair versus a roof replacement.

Personal loans

A personal loan for home improvements might be a solid option if you need fast funding, prefer an unsecured loan and have a good credit score. Personal loans typically range from $1,000 to $50,000 — or even as high as $100,000 — and rates range from 6% to 36%. Exact loan terms may vary by lender but usually range from two to seven years.

Many personal loan lenders require a minimum credit score of at least 620, but you’ll likely need a score over 700 to qualify for the best rates. You may also be charged an origination fee, which can cost up to 10% of the loan amount, although not all lenders charge an origination fee.

HELOC or home equity loan

If you have at least 20% equity in your home, you may qualify for a home equity loan or a home equity line of credit (HELOC) to finance your roof project. A home equity loan is a lump sum of money at a fixed interest rate that you’ll repay in equal monthly installments, much like a personal loan. A HELOC is a revolving line of credit — similar to a credit card — and usually comes with a variable interest rate, meaning your payments fluctuate.

Both types of home equity financing use your house as collateral, meaning you risk losing your home if you can’t repay the loan. Plus, taking out a home equity loan or HELOC can take a while to process, so if your roof is in really bad shape, this is not your fastest financing option.

However, because you’re using the equity funds for a major home improvement project, you may be able to deduct the interest on your taxes. This might be worth it in the long run if your roof doesn’t need to be repaired or replaced immediately.

Contractor financing

Your roofing contractor might offer financing as well. Some may have an in-house financing option or use a third-party financial institution. You may even be able to get short-term, no-interest financing, although you could find that you’re paying more for the roof installation or repairs than with a smaller outfit that doesn’t offer financing.

If you go this route, read the terms and conditions to compare them to other roof financing options, and watch out for hidden fees. You may also be charged higher rates from a contractor — or third-party financer — than other financing options. In addition, contractor financing may require a lien on your house until you repay the loan.

Credit cards

If you’re finding it tricky to qualify for a personal loan or don’t have time to wait for home equity financing, you could put your roofing project on a credit card. Rates are typically higher than other financing options, but if you can pay it off quickly, you can minimize the interest charges.

Another option is to apply for a credit card with a 0% introductory rate, which could give you a year or more of interest-free financing. This may also be a sensible option if you need roof repairs versus a total roof replacement because the cost won’t be as high.

Government assistance

If your credit score isn’t ideal and you meet other requirements, you may be able to get a home improvement loan insured by the US Department of Housing and Urban Development (HUD).
There is the 203(k) standard loan program, which involves refinancing your home and rolling the cost of the roof into your new mortgage. Alternatively, you could look into a Title 1 property improvement loan, which is unsecured up to $7,500.

However, these loan programs aren’t for everyone and may be hard to qualify for. For example, there are restrictions based on age and income level, and it also depends on the type of property you own and where you live. The government doesn’t offer free money to help you repair or improve your home — if you see ads that promise free money, it’s probably a scam.

How to get a roof loan

Obtaining a roofing loan depends on the type of loan you’re seeking, but here are some basic guidelines to get started.

• Get multiple estimates. Most roofing contractors offer free, no-obligation estimates of the costs to repair or replace your roof. Be sure to get a few estimates and ask for detailed, written estimates so you can compare the costs of labor, materials and other charges.
• Consult your budget. Figure out how much you can afford on a monthly loan payment. This amount gives you an idea of how long a loan term you need based on the project’s cost.
• Check your credit score. Knowing your credit score can help you decide which lenders to explore. If your roof replacement or repairs can wait, you may want to work on boosting your credit score before you apply.
• Estimate your home’s equity. If you’re considering home equity financing, you’ll need to know if your home has enough equity to qualify.
• Prequalify. If possible, prequalify with a few lenders to see what rates and terms you might qualify for so you can find the best deal to meet your needs.
• Look out for fees. No matter which loan you apply for, look out for fees such as origination fees or prepayment penalties that add to the loan’s total cost.
• Gather your documents. Find out what documents you’ll need to provide so you’re ready when it’s time to apply. Being prepared makes the loan process go much smoother and faster.
• Read the loan terms and conditions. Once approved for a loan, make sure you understand the terms before signing the contract.

Roof repair vs. roof replacement

In some cases, it makes more sense to repair a roof rather than pay for a total roof replacement. For example, if the damage is minimal and not too expensive to fix, opting for just the repairs could save you a lot of money. However, it may not be as aesthetically pleasing, and you may not get a warranty.

If the damage is fairly extensive, you might be better off getting a new roof. A new roof typically comes with some kind of warranty, and it adds value to your home, which could be important if you plan to sell anytime soon.

Bottom line

A well-functioning roof is a critical part of your home. A roof that’s in poor shape leaves the rest of your house at risk and detracts from its overall value. Whether you need repairs or a brand-new roof, multiple financing options are available, including home equity financing, personal loans, credit cards and contractor financing.

Frequently asked questions

What credit score is needed for a roof loan?

While many lenders work with bad-credit borrowers, you won’t get the best interest rates. Typically, a credit score of 670 or better helps you get a loan with reasonable interest rates.

What loan is best for a new roof?

Paying for a new roof is typically much more expensive than repairing it, so try for a loan with the lowest possible interest rate. If you can qualify, your best option is likely a home equity loan, or you may be able to get a good deal with contractor financing.

Will insurance pay for a new roof?

The only way insurance covers the cost to repair or replace a roof is if it was damaged by a fire, storm or other covered disaster. But even if insurance covers it, you’ll likely have to pay a deductible. Depending on the size of the deductible — and the extent of the damage — it could potentially be less expensive to finance the cost rather than involving the insurance company.