Many people don’t realize that they can finance a swimming pool with a home equity loan. While it will always be cheaper to pay cash for your new pool, there are a number of swimming pool financing options to consider. One way to save money on taking vacations is to have a vacation right in your backyard with your own in ground swimming pool.

Takeaways on Swimming Pool Loans and Financing

  • Four realistic paths: home equity financing, an unsecured pool loan, contractor financing, or cash-out refinancing.
  • Unsecured pool loans fund fastest and require no equity, but carry the highest cost and shortest terms.
  • Your insurance premium will rise, and some carriers require fencing or increased liability limits before they’ll bind coverage.
  • Budget 15% to 20% beyond the contract for permits, electrical, decking, and landscaping.

Meet Lenders that Offer Low Rate Swimming Pool Loans

pool finance loans

Today, is a great time leverage the equity in your home and finance a swimming pool and spa that will give your family more enjoyment while raising the value of your property.

Below we describe some of the common swimming pool loans and financing methods for building a pool and spa in your backyard.

#1 Build a Pool with Your New Home

If you are moving into a new house, one way to get a new pool financed is to just roll that cost into the mortgage for your house. That way you are paying a relatively low payment for your new pool, along with your house payment. The pool loan will be spread over the life of the loan, dropping payments significantly.

However, be aware that if you have a 30 year loan, you could be paying for your pool for many years. Even with mortgage interest rates still a bargain at 3% or so in 2021, you could end up paying nearly double the $25,000 cost of a typical in ground pool in interest charges over the full life of the loan.

A better option for financing a new pool with a new house is to choose a 15 year mortgage so that you save tens of thousands of dollars in interest.

#2 New Pool with an Old House

The most common scenario is buying a new pool with your existing home. In that case, the most common pool financing option is to get a home equity loan or a home equity line of credit (HELOC) to pay for your new pool.

With both loans, you are tapping your home’s equity to pay for your new pool. With a home equity loan, you can pull out much of your home equity in a single lump payment to you. It features fixed interest rates and a fixed payment. The interest rate will be higher than a HELOC-loan, but you know that the payment will stay the same; this is important for many borrowers. The home equity loan may be a good fit for your pool loan because you usually need one lump of cash to pay for the pool. If you have credit problems in the past, consider a home equity loan or HELOC for bad credit

Or, you can get a home equity line of credit, which functions similarly to a credit card. You will be approved up to a certain amount, and you can draw it out whenever you like. Interest rates are variable with HELOCs; while you will likely have a lower rate initially than a fixed 2nd mortgage, note that the rate can and will go up. It can go up in the short term if interest rates rise. It also will go up eventually when the draw period ends. At that time, you must pay both interest and principal, which will hike the payment substantially.

If you do not have sufficient equity in your home to pay for your pool, you may need to get a personal home improvement loan. These pool loans are unsecured, meaning that you will need to pay a higher interest rate for a shorter term. For example, a $25,000 pool loan at 7.5% would cost $297 per month for 10 years, or $500 per month for five years. If you can handle the higher payments, go for the shorter term as you will save big on interest. Learn more about personal and home improvement loans to see which type of swimming pool financing makes the most sense for your needs.

One good thing about adding a pool to your home is that when it is done, experts recommend you have the property appraised again. In many cases, you will add substantially to the home’s value. It could make it worthwhile to refinance your pool loan along with your first mortgage into a new mortgage.

You may need to pay closing costs and points, but you will probably save over the long haul by dropping the pool loan rate to the same as your mortgage rate.

#3 Old Pool and Old House

Some people may have an old house and an old pool that they want to remodel. You may be able to pay for the remodel on the pool if you have equity, by using a HELOC or equity home loan. This is considered secure pool financing and the lien is secure by your house.

If not, your options are to either pay for it with a credit card or to apply for special pool financing for existing pools. The interest rates will usually be high – above 12%, but you will not need to mess with your other lines of credit, and you can usually pay only 2% of the balance each month. One of these lenders is called Aquavantage.

A credit card really is the last ditch option as the interest rate is usually very high.  We would recommend that you only do this if your rehab of the pool is only going to cost a few thousand dollars.

FAQs on Swimming Pool Financing

Can you get a loan for a swimming pool?

Yes, through several routes. Unsecured pool loans from banks, credit unions, and online lenders require no equity and often fund within days, with terms typically running five to twelve years. Home equity financing costs less but requires equity and takes weeks. Contractor financing is arranged through your pool builder — convenient, though the rate is frequently marked up from what the underlying lender offers. Compare at least three options before accepting whatever your pool company presents, since the convenience of in-house financing often carries a measurable premium.

Does a swimming pool increase home value?

Less than most owners expect. Appraisers typically credit a fraction of installed cost, and the figure varies enormously by region. In warm climates where pools are common — Arizona, Florida, parts of Texas and California — a pool may be expected in certain price tiers. In cooler markets, appraisers may assign little value, and some buyers view a pool as a maintenance liability that narrows your eventual buyer pool. Finance a pool because you want one, not as a return-on-investment calculation.

What credit score do you need for a pool loan?

It depends on the structure. Unsecured pool loans generally require 650 or higher, with the best pricing reserved for 700-plus, because the lender has no collateral. Home equity financing often reaches lower — your equity position does work your credit score can’t, and some lenders approve below 620 at conservative loan-to-value. Contractor financing varies widely; some programs accept weaker credit at considerably higher cost. If your score sits below 650, home equity is usually your least expensive route if you have the equity.

How long does pool financing take?

Unsecured pool loans can fund in two to seven days — some online lenders close same-day for well-qualified borrowers. Home equity financing runs two to six weeks, depending on whether the lender requires a full appraisal. Contractor financing is typically fastest, often approved during your initial consultation. Timeline matters more than usual here: pool installation is seasonal, and builders in warm markets book months ahead. Secure financing before you sign a construction contract, not after, so a funding delay doesn’t cost you your installation slot.

Should you include landscaping and decking in your pool loan?

Yes, and budget more than your contractor’s quote suggests. Pool contracts frequently cover the shell, equipment, and basic decking — leaving fencing, landscaping, lighting, electrical upgrades, and permits as separate costs. Those extras commonly add 15% to 25% to the total project. Financing them together under one loan is simpler and usually cheaper than putting overflow on a credit card mid-project. Ask your contractor for a written scope listing exactly what’s excluded, then add that to your loan request before closing.

The Bottom Line with Swimming Pool Loans

Adding a pool to your home can really increase your enjoyment, as well as the value of the home when it comes time to sell it. You should be able to find a way to finance your new pool with the many options available.

Generally, we think that the best pool financing option is a home equity loan with a steady, fixed payment with a relatively low interest rate. But you may decide to opt for a HELOC or a home improvement loan. Take a few minutes and shop companies to find the best home equity rates today.

Your options are greater if you have good credit and equity in your home. If not, you still may be able to finance your swimming pool and jacuzzi to minimize your out of pocket expenses.

RefiGuide.org is an advertising marketplace, not a licensed mortgage lender or broker. Home equity and pool loans are matched with participating NMLS-licensed institutions.