Installing a pool is one of the most exciting home improvement projects a homeowner can undertake. It not only adds aesthetic and recreational value but can also boost property value under the right conditions. However, with installation costs ranging from $30,000 to over $100,000 depending on the type, size, and location, most homeowners need financing to make their dream pool a reality.
This guide explores everything you need to know about how to finance a pool, including types of financing, how to qualify, and the smartest strategies to manage the costs.
Understanding Pool Costs
Before diving into financing, it’s important to understand the full range of costs involved in building a pool:
1. Installation Costs
-
Inground pools: $35,000 – $65,000+
-
Above-ground pools: $2,000 – $15,000
-
Luxury features (e.g., waterfalls, lighting, spas): can add $10,000 – $50,000+
-
Excavation and landscaping: additional $5,000 – $20,000
2. Maintenance and Upkeep
-
Monthly maintenance: $80 – $150
-
Annual repairs: $500 – $2,000
-
Utilities: Increased water and electricity bills
3. Permits and Insurance
-
Permits can range from $100 – $1,000 depending on your city.
-
Homeowners insurance premiums may increase to cover the liability risk.
Top Pool Financing Options
1. Home Equity Loans (HEL)
A home equity loan allows you to borrow against the equity in your home, usually at a fixed interest rate.
-
Pros:
-
Lower interest rates than unsecured loans
-
Fixed monthly payments
-
Potential tax deduction on interest
-
-
Cons:
-
Your home is used as collateral
-
Long approval process
-
Risk of foreclosure if you default
-
2. Home Equity Line of Credit (HELOC)
Similar to a HEL, but instead of a lump sum, you receive a line of credit to use as needed.
-
Pros:
-
Flexibility in borrowing
-
Interest-only payments during the draw period
-
Often lower rates than personal loans
-
-
Cons:
-
Variable interest rates can increase over time
-
Risk of losing your home if you can’t repay
-
Requires strong credit and equity
-
3. Personal Loans
Unsecured loans from banks, credit unions, or online lenders can be used to finance your pool.
-
Pros:
-
No collateral required
-
Quick approval process
-
Fixed interest rates and terms
-
-
Cons:
-
Higher interest rates than secured loans
-
Shorter repayment periods
-
Credit score heavily impacts approval and rates
-
4. Pool Financing Through Contractors
Many pool builders partner with lenders to offer financing directly.
-
Pros:
-
Streamlined process (often included with the quote)
-
Promotional offers (e.g., 0% interest for a period)
-
-
Cons:
-
Rates may be higher than market averages
-
Limited loan term flexibility
-
Hidden fees or bundled services
-
5. Cash-Out Refinance
Refinance your existing mortgage for more than you owe and take the difference in cash.
-
Pros:
-
Competitive interest rates
-
Potentially lower overall monthly payments
-
Can consolidate other debts
-
-
Cons:
-
Lengthens your mortgage term
-
Closing costs can be substantial
-
Risk of foreclosure
-
6. Credit Cards
Not generally recommended unless it’s for a small project or you have a 0% APR promotional period.
-
Pros:
-
Easy to access
-
Good for short-term, smaller purchases
-
-
Cons:
-
Very high interest rates (often 18–25%)
-
Can negatively impact credit utilization
-
Limited borrowing capacity
-
Factors to Consider Before Choosing a Financing Method
1. Credit Score
Most lenders require a credit score of 620+ for personal loans, and 680+ for the best rates on HELs or HELOCs. The better your score, the lower your interest rate and the higher your chances of approval.
2. Equity in Your Home
To qualify for HEL or HELOC, you’ll need 15–20% equity in your home. The amount you can borrow typically depends on your Loan-to-Value (LTV) ratio.
3. Income and Debt-to-Income Ratio (DTI)
Lenders will want to ensure you can afford the new loan payments. Generally, a DTI below 43% is favorable.
4. Loan Terms
Make sure you understand the length of the loan and total interest paid over time. A lower monthly payment may cost more in the long run.
5. Interest Rate Type
Some loans have fixed rates; others (like HELOCs) have variable rates. Be cautious if interest rates are expected to rise.
Smart Tips for Financing a Pool
1. Get Multiple Quotes
Always get at least 2–3 estimates from pool builders to compare pricing, features, and timelines. This also helps determine how much financing you actually need.
2. Check Your Credit and Improve It If Needed
A few months before applying for financing, check your credit reports. Pay down debts, resolve disputes, and avoid new credit lines to improve your score.
3. Budget for More Than Just Installation
Unexpected costs arise frequently during pool construction, especially if your yard needs major work or if there’s utility rerouting required. Build a 10–15% buffer into your budget.
4. Think About ROI
Pools don’t always increase home value, especially in colder climates. Consider resale value and neighborhood norms before investing.
5. Use Promotional Financing Wisely
Some credit cards and contractor financing plans offer 0% interest for a short period. If you can pay off the balance within that window, it’s a good option—but be cautious of deferred interest terms.
6. Don’t Over-Borrow
It’s tempting to upgrade to the infinity edge or the full outdoor kitchen while financing, but try to stay focused on what you truly need and can afford.
Alternatives to Traditional Financing
1. Savings or Sinking Fund
Saving over time may delay your project but will help you avoid interest payments and reduce long-term financial stress.
2. Borrowing from a 401(k)
This is a last resort. Though you’re borrowing from yourself, you’ll lose investment growth potential and could face penalties if you don’t repay it correctly.
3. Grants or Assistance Programs
In rare cases, local governments or utility companies offer grants or rebates for eco-friendly pool systems (e.g., solar heaters or covers). Check your local municipality.
Case Study: Which Option Is Best?
Let’s look at a hypothetical scenario:
Sarah and Mike, a couple with a $400,000 home and $250,000 left on their mortgage, want to install a $60,000 inground pool.
-
They have $80,000 equity in their home.
-
Credit scores are around 720.
-
They earn $150,000 combined income annually.
Options:
-
HEL: 10-year term at 6.5%, monthly payments ~$680.
-
HELOC: 10-year draw, variable rate starting at 5.5%.
-
Personal loan: 7.9% APR, 7-year term, ~$930/month.
-
Cash-out refinance: New 30-year mortgage at 5.2%, $310,000 total.
Best Choice: A home equity loan gives them a fixed, manageable payment and a reasonable interest rate without altering their primary mortgage. The HELOC is riskier due to variable rates.
Final Thoughts: Is Financing a Pool Worth It?
Financing a pool can be a smart move—if approached with a clear plan, solid credit, and a realistic budget. Whether it’s for family fun, fitness, or enhancing your backyard experience, there are multiple financing routes to choose from.
Be sure to:
-
Evaluate your total project cost
-
Consider the long-term maintenance expenses
-
Choose a financing method aligned with your financial goals
-
Understand the terms of your loan or line of credit
A well-planned approach can turn your backyard into a paradise without sinking your finances.