Swimming Pool Financing

While most Canadians experience long winters, many are also see lots of hot summer weather when the season rolls around. When those temperatures arrive, it’s a huge relief to have a nice pool to jump in. The only problem is that most pools, whether large or small, can be pricey to purchase and maintain. No need to worry, because the right type of financing will help you buy the pool of your dreams over time. 

How Much Does Swimming Pool Financing Cost?

Unfortunately, financing a pool isn’t always easy or cheap and there may be a ton of different costs to consider before you begin the process. For instance, the type of pool you want can cause the price to vary greatly:

Inground Pools

To finance an inground pool made of concrete, granite or fibreglass, you’ll probably pay at least $15,000 – $45,000 in construction, plus $1,500 – $5,000 for it to be coated with vinyl. Inground pools also require a lot of maintenance. 

Semi-Inground Pools

These pools are usually cheaper than fully inground pools (starting around $10,000 in construction costs). However, they can require more maintenance than other kinds of pools, particularly when made of wood. 

Natural Pools

If you prefer a pool with no chlorine or other harmful chemicals, a natural pool will cost about $100 – $150 per square foot (roughly $20,000, depending on the size). While maintenance can be cheap, you’re essentially building a pond, so you may have to swim with and upkeep various plant life.

Additional Costs To Consider When Choosing A Pool

When it comes to certain pools, there could be many other important costs to consider and budget for, including:

• Installation Fees – Unless it’s included with construction, installing and filling your pool generally costs $1,000 – $2,000 extra. Most towns and cities also have laws that require you to buy a fence or gate (at around $15 to $400 per square foot).
• Saltwater or Chlorine – It costs about $120 annually to fill a pool with chlorine and $50 for saltwater. Although saltwater pools start cheaper because you don’t have to add chlorine to them, you’ll need to buy a saltwater-chlorine generator, which can cost $800 – $1,500 and must be replaced every 5 years or so.
• Home Insurance – Some home insurance policies are already expensive and will increase by $30 – $50 a month if you want your pool covered too. 
• Maintenance and Replacements – As mentioned, opening, closing and maintenance can all become sizable costs that pool owners must deal with upon installation and throughout the years. Tack on $200 annually for this service if you hire a professional and more for any parts that need replacing.  
• Extra Features – Your bills will keep rising if you want your pool to have additional comforts, such as a heating and lighting system, waterfall, diving board or slide. For instance, you’ll most likely pay $1,000 – $4,000 to install a simple water heater, plus $1,000 a year in electricity, on top of your other utilities. 

Swimming Pool Financing Options

Pools come in all shapes, sizes, and costs. There are above-ground pools that you can purchase on the spot and set up with your friends, family, or a technician. Then there are in-ground pools that require weeks of labour and a team of builders to construct. 

Luckily, there are also a number of different ways to finance these various pools, each of which can be useful in its own way. Some of the more common options include:

Swimming Pool Financing: Installment Loan

A personal installment loan is a specific lump sum of money that you can borrow from almost any lender in Canada. If your application is approved, the funds will be transferred directly to your bank account. You would then use them to finance your pool, then repay the lender over time through equal installments, plus interest.

Pros

• If the loan is unsecured, you won’t have to offer collateral to get approved for it
• A loan is good for financing the initial building and installation costs of the pool
• Some lenders let you choose a fixed or variable interest rate
• Loans often have lower rates than other payment methods, like credit cards

Cons

• Unsecured loans have higher rates than those that are secured with assets
• If the loan is secured, you could lose your collateral by going into default
• Large loans can be hard to acquire if you have bad credit or a low income
• Bad credit loans are often smaller and more expensive due to higher rates

Finance Your Swimming Pool With A Home Equity Loan

If your home has accumulated sufficient equity, you can use it as collateral to secure either a home equity loan or a home equity line of credit (HELOC). The value of your home will need to be appraised and the amount you get approved for will be based on that plus the amount still owed on your mortgage. But, you could potentially gain access to a larger loan with more favourable terms. 

Pros

• Loans are secured against your home, leading to lower interest rates
• Fixed, variable, and competitive rates may be available with some lenders
• Home equity loan terms can last one or more decades
• If you have good finances and a valuable home, you may get a larger loan
• Installing an in-ground pool could increase your home equity

Cons

• The loan may qualify as your second mortgage, giving you two sets of payments 
• Your home could be foreclosed if you default on the loan
• Other serious debt-related penalties can apply if you miss payments
• Approval could require a legal process and home appraisal (additional fees)

In-House Pool Financing

If none of the products above seem right for you, there are many pool wholesalers that offer in-house financing, as well as store discounts or seasonal deals. Most wholesalers will even have a building crew on sight, which will save you from having to hire your own contractor. 

Pros

• You’ll probably have an easier time getting approved, even with weak credit
• Some dealers will offer you promotions and other benefits if you buy a pool
• Applying can be faster and more convenient than with a third-party lender
• Some retailers/dealers offer cheap or free installation and maintenance

Cons

• Some dealers will trick you into financing an unaffordable pool for way too long 
• Interest rates can be higher than traditional lenders offer on unsecured financing 
• Those rates can get even worse when you apply with bad credit or a low income
• Many dealers add lots of service and administrative fees to your final bill

Finance Your Swimming Pool By Refinancing Your Mortgage

If none of the above methods works for your finances, you can also consider refinancing your mortgage by replacing your existing loan with a new one that has different (and often more appealing) conditions. If you qualify, your equity level rises. You can then borrow up to 80% of your home’s new value and use the proceeds to finance your pool.

Pros

• You can potentially secure more financing than your equity initially allowed for
• Interest rates can be lower than those of your original mortgage
• Your loan term will extend, meaning your payments could become lower too
• Once again, putting in a nice pool will further increase your home equity

Cons

• A lengthier payment term can lead to more fees and interest charged over time
• The longer you’re in debt, the more chance you’ll have of defaulting someday
• By refinancing, you’re basically refilling a debt that you may have already paid off

Pool Financing With A HELOC Or Personal Line Of Credit

Financing a pool isn’t always a one-time expense. Some costs, like maintenance, utility fees and repairs can go on as long as you own the pool. In that case, a home equity line of credit (HELOC) or personal line of credit will allow you to dip into a pre-authorized revolving credit limit for many years, similar to a credit card. 

Pros

• Line of credit terms can be open-ended (or longer than other payment methods)
• These options provide more flexibility than other financing products
• Minimum and partial payments are normally acceptable
• Interest is only applied to what you borrow and leave outstanding each month

Cons

• A HELOC is secured against your home, which means a risk of future foreclosure
• A personal line of credit might be unsecured, resulting in higher interest rates
• Qualifying may not be as easy as other pool financing methods

Check out this guide on how to choose the right loan.

How To Prepare To Apply For Swimming Pool Financing

Depending on the option you’ve selected, applying for pool financing can be relatively simple or more complicated, as each solution comes with a different level of financial responsibility.  A credit card, for instance, is typically easier to obtain than an installment loan. 

Nonetheless, being prepared for the application process is one of the best ways to get approved for an adequate amount of credit, an affordable interest rate, and an adjustable repayment plan. Make sure to organize your finances for your lender’s inspection and ask yourself some of the following questions before you apply:

Is Your Credit Score High Enough?

For most lenders, a credit score of 660 – 900 is a sign that you’re more likely to make payments on time. The higher your credit score is, the less risk you present and the better your pool financing conditions will be. Be sure to check your credit score before applying.

Can You Afford Your Monthly Payments?

You must also prove that you have an income and savings that would support all costs associated with your pool financing. Any short, late, or missed payments could result in a reduced credit score and other financial problems that are hard to recover from.

Is a Pool Going to Bring Value to Your House?

Although some pools are expensive, they can also add value to your property, which is great if you plan to sell it someday. Additionally, the more valuable your home is, the more equity it will collect. However, this might drive up the price of the property, making it less affordable for a lot of prospective homebuyers in the future

Are There More Important Expenses You Should Focus On?

For obvious reasons, a pool may not be the best financial weight to take on. In fact, it may be totally out of your budget, especially if you have other, more important monthly expenses to deal with, such as your mortgage payments and credit card bills.

What Are Your Debt Levels?

When applying for pool financing, your unpaid debts make a huge difference in the conditions you’re eligible for. After all, the more likely you are to default on your payments, the less credit your lender will offer and the more interest they will charge, which could certainly result in unmanageable debt levels. 

How To Apply For Swimming Pool Financing?

Remember, applying and qualifying for swimming pool financing isn’t always easy. There could be many requirements, so make sure to follow these steps: 

Step #1 – Know Your Finances And Credit Limitations

A pool is a serious investment, so organizing your finances is the first thing you should do before you apply for financing. Form an estimate of your projected pool costs (now and in the future) to confirm whether your income and savings would suffice. Think about what could happen if you suddenly lost your job or took on too much other debt.

At the same time, it’s a smart idea to check your credit report and credit score through both of Canada’s credit bureaus (Equifax and TransUnion). Typically, a credit score of 650 – 900 is considered good and, when coupled with a responsible payment history, can help you get approved for more appealing financing amounts, rates, and terms. 

Step #2 – Research Pools And Their Costs

The only way to get an accurate estimate of your pool’s potential costs is to do research and get quotes from retailers/dealers in your area. Look at all the models that might work for you and don’t forget to consider any additional factors, such as:

• Installation, maintenance, and utility costs
• Special features (safety, lighting, entertainment, etc.)
• Size, water type, and construction materials
• Permits required (municipal, provincial, etc.)
• How much professional help you’ll need to build and maintain the pool 

Step #2 – Compare Financing Sources And Loan Offers

In Canada, plenty of lenders, retailers and dealers can offer you pool financing. Each of these sources will have different approval standards, products and costs, so it’s important to do research here as well. You should also be sure to:

• Pick A Good Term – When choosing a pool financing term, your ability to make payments is key. While longer terms lead to lower, more affordable payments at first, the interest and fees you pay over time can drive up the pool’s overall cost.
• Think About A Down Payment – You can decrease the length of your term and the final cost of your pool by offering a reasonable down payment. Most experts recommend paying 10% – 20% of the sales price upfront.
• Improve Your Credit – If your credit score is within the 300 – 600 range, you have bad credit and, as a result, lower chances of approval for good pool financing conditions (higher rates, smaller funding amounts, shorter terms, etc.).
• Compare Several Sources – Don’t be afraid to weigh your options and shop around with banks, credit unions, alternative lenders and pool retailers in your area. Some of these sources may even be open to negotiation.          

Step #3 – Apply

When applying for pool financing, keep in mind that every lender has its own requirements. For instance, banks have tougher restrictions and more extensive inspections, leading to slightly longer funding times of several business days, while alternative sources can be easier and faster (sometimes within 24 hours). 

However, you’ll need a meet a few requirements to apply for pool financing with most lenders, including but not limited to:

• Government photo identification (passport, driver’s licence, etc.)
• Proof of income and bank account (latest pay stubs, bank statements, etc.)
• Information about your other debts and assets (mortgage, vehicles, etc.)
• Details about the pool you want (price, taxes, model, etc.) 

A co-signer or guarantor (if your finances and credit aren’t great)

Cost Of Financing A Swimming Pool

Because some pools can lead to exorbitant short and long-term costs, it’s essential to take these pricing factors into account before you attempt to finance one in Canada:

• How Much Financing You Need – Depending on your pool and financial stability, it may be smarter to borrow a single loan or withdraw from an open line of credit. Either way, be sure not to borrow more than you can comfortably afford.
• How Expensive Your Interest Rate Will Be – Banks often charge better rates than alternative lenders. Having good credit, healthy finances and a down payment when you apply for pool financing can also lead to lower rates. 
• Whether You Want A Fixed Or Variable Rate – Fixed interest rates don’t change over time but variable interest rates go up and down according to the Bank of Canada’s prime rate.
• The Length Of Your Term – Shorter terms result in higher rates and payments but less interest over time, which is why a one-time loan may be a better choice for singular costs and an open-ended line of credit can be good for ongoing ones.        

Additional Reading

What Is A Purchase Plus Improvements Mortgage?

What Is Homeowners Liability Insurance?

Renting Out Your Basement Suite

Frequently Asked Questions

Find Your Pool Financing Today

If you’re looking to increase the value of your home and cool off in the process, adding an in-ground or above-ground pool to your property may be the best way to do it. What’s more, you can rest easy knowing that Loans Canada is always here to help you find the best sources of pool financing in your area of the country.