Home Improvement

How much does a home addition cost?

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Home additions are among the most expensive and time intensive renovations that can be done on your home. If you’re on the fence about moving forward with adding onto your home, the home addition cost is probably one of the biggest determining factors. You can expect on average to spend anywhere from $25,000 to $100,000 and up on room addition costs depending on the size and location of the addition.

How much does an addition cost, though? It’s important to set a budget for your project and come up with an affordable plan for coming up with the cash or the room addition cost can get out of hand and put a damper on your perfect home dreams.

Types of home additions

Your home may have been the perfect size when you purchased it but now you need a spare bedroom. Perhaps you purchased a fixer-upper with the intention of expanding when the time was right. Whatever the case, there are many different types of home additions and your home addition cost will primarily depend on which type you intend to build.

Some of the most popular types of home additions include:

  • Living room addition
  • Kitchen expansion
  • Bedroom addition
  • In-law suite
  • Bathroom addition
  • Garage addition
  • Porch addition
  • Second story addition

Cost breakdown of a house addition

How much does it cost to add a room to a house? The answer is not as straightforward as you might think. Builders use many different factors to calculate a quote for a home addition, including size and location.

  • Addition size: While many online resources will offer estimates for the cost of a home addition by calculating the price per square foot, it isn’t usually accurate. A 100-square-foot addition will not cost twice what a 50-square-foot addition costs. On average, doubling the size of an addition will increase the price by one-third.
  • Existing obstacles: Where do you plan to build your home addition and what’s there right now? Indoor and outdoor obstacles need to be removed or relocated to make room for an addition which in turn drives up the project cost. Think about landscaping, HVAC systems, electrical wiring and even hidden obstacles like underground pipes.
  • Building materials: Most people who build a home addition want the new part of the home to match the existing structure. You’ll have to pay for whatever materials were originally used to build your house if this is something you want for your addition. For example, wood is three times as expensive as vinyl siding. You’ll also likely need to extend the roof to cover the addition.
  • Local zoning laws: Every municipality has different zoning laws for home additions and your home addition cost could go up if you need to meet certain compliance standards. Water drainage, septic systems and electrical wiring are just a few examples of components that could be regulated. A qualified local builder will be able to inform you about the specific requirements in your area.

Tips to save on a home addition

If you’re worried about how much house additions cost, there are plenty of tricks you can use to bring the final price of a new room down that include:

  • Get bids from multiple local contractors.
  • Take advantage of tax refunds for energy-efficient construction.
  • Use fewer expensive building materials.
  • Don’t opt for fancy customizations.
  • Shop around for the best interest rate on financing.

Home addition financing options

Most homeowners aren’t able to pay cash for a home addition. The average room addition cost is at least five figures, which is more than the majority of families have lying around in a bank account. Financing is a great way to pay for a home addition, and financing options include:

Personal loan

If you’re planning a small home addition in the lower price range, a personal loan could be the best financing option. These loans don’t require collateral and are approved using your credit score and history. This means you’ll need to have a great credit score to get a decent interest rate, but you may be able to be approved for a personal loan with all ranges of credit.

However, if your projected home addition cost is on the higher end, you probably won’t be able to get approved for the full amount as a personal loan and will have to look into other methods of financing.

Home equity loan

Home equity loans are one of the most popular ways to finance a home addition. Adding onto your home is an investment in its market value, so it makes sense to pay for it using the existing equity in your home. This is essentially what a home equity loan does: you’re given a lump-sum loan for a percentage of your equity that is secured against your home. You’ll repay the loan over time, much like a second mortgage. The only caveat is that you’ll need to have enough equity in the home to cover the home addition cost, which likely won’t be the case for more recent homeowners.

Home equity line of credit

A HELOC, or home equity line of credit, is a line of credit that’s secured against your home and is the most flexible way to finance a home addition. A HELOC acts more like a credit card than a lump sum loan. You’re given a line of credit for a percentage of your home equity that you can borrow against without taking more than you need. This will give you peace of mind that you’ll have access to additional emergency funds should you need them, which is ideal for home improvement projects since unexpected costs can arise at any moment.