Pool Financing 101: How to Pay For a Pool in 2023
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On a hot summer day, a dip in a cool pool feels priceless. But installing that swimming pool definitely comes with a price tag.
Pools can cost from several hundred dollars to more than $100,000, depending on the type of pool you’re installing and whether you include additional features.
Cash is the interest-free way to pay for your backyard oasis, but saving up could take years. Instead, there are a handful of ways to borrow for the project. The best pool financing option depends on the estimated cost as well as your home equity, credit and income.
5 pool financing options
Personal loans are often unsecured, meaning you don’t pledge collateral like a house or car to borrow the money. Instead, lenders consider your creditworthiness when deciding whether to lend to you. You get a personal loan in a lump sum and repay it in monthly installments, usually over a term of two to seven years.
Personal loan amounts are $1,000 to $100,000, and annual percentage rates range from 6% to 36%, but your specific loan offer depends on information like your credit score, credit history, income and other debts. The lowest rates and largest loans usually go to borrowers with good or excellent credit (690 or higher score), high incomes and low debt.
When personal loans are best: Consider a personal loan if you don’t have enough equity in your home to cover the cost of a pool. It may also be a good choice if you need the funds fast because personal loans are often funded within a day or two of approval. And because loan amounts are fixed, they work when you have a firm cost estimate for your pool.
» MORE: Compare the best pool loans
Pros and cons of financing a swimming pool with a personal loan
» MORE: Best home improvement loans
Home equity loans
A home equity loan is a second mortgage that you borrow in a lump sum and repay in fixed monthly installments.
With a home equity loan, you can borrow around 85% of your home’s value, minus what you owe on your mortgage. These loans have repayment terms of up to 15 years, and average rates start around 9%.
When home equity loans are best: Home equity loans work best if you have enough equity to pay for the new pool and prefer fixed payments. This option also requires a firm cost estimate because you can borrow only once.
» MORE: Compare home equity loan lenders
Pros and cons of financing a swimming pool with a home equity loan
Home equity lines of credit
A home equity line of credit (HELOC) is an open credit line that you draw from as needed during the pool installation. You can make interest-only payments during the “draw period,” which is usually the first 10 years. After that, you repay the amount borrowed for up to 20 years.
You can usually borrow up to 85% of the home’s value, minus what you owe on the mortgage. Average APRs start around 9%, but the rate varies during the loan’s lifetime.
When home equity lines of credit are best: A HELOC’s flexibility makes it a good choice if you’re concerned about surprise expenses or if the cost estimate could change.
Pros and cons of financing a swimming pool with a HELOC
With a cash-out refinance, you get a new mortgage that’s larger than your current mortgage. You use the new loan to pay off the old one and cover the swimming pool with the extra cash.
Because you’re replacing the old mortgage, you’ll have a new rate and repayment term. Common mortgage repayment terms are 15 and 30 years, and rates are often from 6% to 8%.
When cash-out refinancing is best: Cash-out refinancing works best if you need a large loan for a major pool installation. Ideally, you also get a mortgage rate that's lower than the previous one.
Pros and cons of cash-out refinancing for a swimming pool
Some pool installation companies and contractors offer unsecured financing through a third-party lender. Amounts, rates and terms vary by company, but you could borrow up to $200,000 or more. Repayment terms are up to 20 years and rates start around 5%, but maximum rates could be 25% or higher.
This type of financing is usually offered in person after you and the contractor have agreed on a budget, but it’s smart to take a day or two to compare other options.
When contractor financing is best: This choice is best if it’s your lowest-rate option with repayment terms that fit your budget. It also works well if you want to start right away, because approval can be fast.
Pros and cons of using contractor financing for a swimming pool
Steps to finance a pool
Determine the pool’s cost. Get quotes from contractors and decide how much you’ll need to borrow. Because options like personal and home equity loans come in a lump sum, you need a firm estimate to apply for the correct amount.
Compare financing options. Once you have a solid cost estimate, compare loan options up to that amount. For example, if the new pool will cost more than you can borrow in equity, then a personal loan may be a better option.
Compare rates. After you’ve chosen the financing option with the right loan amount and repayment structure, compare lenders to find the lowest rate.
Make a repayment plan. Calculate your monthly pool loan payments and see if they fit in your budget. Make a plan to pay on time each month over the entire loan term.
Apply. Once you’ve chosen a lender, submit an application. This step will usually trigger a hard credit pull, which will cause your credit score to dip temporarily.
How much do pools cost?
The cost to build a pool depends on whether it’s in-ground or above-ground, the materials used to build it, the pool’s size and depth and whether you add other features like a waterfall or diving board.
Your financing options narrow as you firm up the cost estimate. For example, a cash-out refinance may not be the right option for a lower-cost above-ground pool because the closing costs may be higher than the pool cost.
In-ground vs. above-ground pool cost
One of the biggest factors influencing the pool’s cost is whether it’s in-ground or above-ground. An in-ground pool can cost $20,000 to $100,000, while an above-ground pool costs $700 to $5,000, according to the home improvement website HomeAdvisor.
Other installation costs to consider
Size: An in-ground pool costs $50 to $125 per square foot and an above-ground pool costs $10 to $15 per square foot, according to HomeAdvisor. At the low end, a 400-square-foot in-ground pool costs $20,000, while a 600-square-foot pool costs $30,000.
Materials: Materials to build an in-ground pool could heavily impact the cost. For example, HomeAdvisor estimates that a concrete pool costs $35,000 to $65,000, while a vinyl pool costs $20,000 to $40,000.
Add-ons: Here are the costs of some pool add-ons, according to HomeAdvisor.
Diving board: $300 to $5,000.
Covers: $600 to $2,200.
Waterfall: $1,500 to $5,000.
Heating: $1,800 to $4,000.
Pool maintenance costs
Cleaning: If you’re not cleaning the pool yourself, you’ll want to budget for regular cleaning during pool season. This service costs $115 per visit on average, according to HomeAdvisor.
Maintenance: Your new pool may also require water level checks, pH level maintenance and winterization. HomeAdvisor estimates that having a professional maintain your pool can cost $110 to $351 per year.
Repairs: After enough use, your pool will likely need repairs. These can be minor repairs of less than $100, but some fixes, like pool heater repairs, can cost more than $1,000.