Concrete inground pools. Saltwater pools. Fiberglass pools. Infinity pools. Vinyl liner pools. If you're determined to beat the heat this summer while adding a cool and classic touch of luxury to your home, you have more than your fair share of pool options. And if you're not paying for your new backyard addition out of pocket, you also have plentiful options for financing your dream pool, no matter what style you choose.
Of course, some of these pool financing options will make a much bigger splash on your monthly budget than others. Get a grip on your estimated pool costs, visit your mortgage lender and consult with a pool builder before you wade into the deep end of home improvement financing.
Average Pool Costs
Before you even dip your toes into the unexplored waters of pool financing options, you need to have a crystal clear budget in mind. According to 2018 estimates from HomeAdvisor, the average cost of installing an inground pool in the United States is between $35,432 and $65,336. If that seems like quite a wide range, it's only because you have an equally wide range of pool options.
Per the same source, concrete pools fall in the $30,000-to-$50,000 range, on average, while vinyl-lined pools have an average initial building cost of about $20,000-to-$40,000. Fiberglass pools offer a more value-minded solution, at roughly $20,000 on the low end or about $36,500 on the high end. At the top end of the scale, saltwater pools have an average price range of $34,500-to-$67,000.
In general, expect to pay somewhere between $50-to-$90 per square foot of your future pool and allow an extra $1,000-to- $8,000 for extra features, such as heating, diving boards or fancy mood lighting.
Retailer and Builder Payment Plans
Taking on a swimming-pool payment plan is among the most common options for funding this type of project. Many pool builders and pool retailers offer loans and payment plans in-house, or through collaboration with a lender. Taking this route saves you the time and research of pursuing your own financing options.
Like any other loan, interest rates, terms, maximum funding amounts and monthly payments vary widely per lender. Likewise, these types of loans come in secured and unsecured varieties. The former type requires collateral, usually equity in the home where you'll be installing the pool, and comes with typically fixed rates of about 4.5-to-6.5 percent. The latter type does not require collateral but usually comes with higher interest rates, as it puts the lender at greater financial risk.
Often, pool builders and retailers will accept a flexible portion of the project price up-front, paid in cash or credit. The more you're able to pay up-front, the less you'll have to borrow, which makes for lower monthly payments and a shorter term. Some builders will also accept a lump sum payment for final construction phases, such as applying the pool's finish, so don't be shy about asking for a little flexibility.
Common Pool Construction Loans
A few types of traditional loans cater particularly well to pool-building projects – in fact, banks and other lenders commonly offer home improvement loans just for home expansion projects of this ilk. Your bank is usually more willing to approve a home improvement loan if you already have a mortgage with them, especially if you have a solid track record on paying that mortgage.
At an interest rate of 5 percent, a total amount of $40,000 and a 60-month term, you'll be looking at monthly payments of about $755. Home improvement loans also come in secured and unsecured varieties and typically feature repayment periods between 12 months-to-12 years. Beware, though, as there's a chance that the loan's interest rates may increase with a longer repayment term.
Your pool installation financing options don't end there, though, as home equity loans also serve this purpose reasonably well. Your home equity or the difference between the home's market value and the mortgage balance still owed, determines how much you're able to borrow, so this loan option is especially advantageous if you're well into your mortgage and have built up a lot of equity. Although you can get a home equity loan from many banks, credit unions and other financial institutions, borrowing from the same lender as your current mortgage streamline the process, provided you're in good standing. Home equity loans offer a quicker-than-average approval process, and their interest rates are usually lower than either a mortgage or a personal loan. Their repayment periods span about 10-to-15 years, and the interest you pay may even be tax deductible.
Just like a home improvement loan from a bank, nonprofit credit unions offer loans to their members (who, by the nature of credit unions, are also their owners). These loans work like just about any other, but a loan from a credit union is more likely to give you lower interest rates and fees compared to a standard bank loan.
More Pool Financing Options
In the same vein as a home equity loan, a home equity line of credit – also known as a HELOC – uses your home's equity as a line of credit (hence the name). Though a HELOC's variable interest rates can change with the market, you'll only pay interest on the amount that you borrow and, even better, you can borrow incrementally as your pool-building budget evolves. On a regular loan, you'll pay interest on the whole lump sum, even if you only end up using a portion of the money you borrow to build that sweet, new infinity pool.
You can also choose to finance your pool installation – or at least a chunk of it – with a high-limit credit card. Paying for the whole pool with a credit card usually invokes a merchant service fee of about 3 percent of the total cost, and because credit card interest rates are generally substantially higher than that of a bank loan, it may be wise to consider this a last resort. If you do go the plastic route, always pay on time and pay off as much of the balance as possible each month to protect your credit score and avoid expensive late fees.
Is It Worth It?
Before you dive in to pool construction, remember that the costs incurred by your new pool don't end after it's installed. Because a pool increases your home's liability, your home insurance costs will go up a bit but only about $30 a year. But let's not forget maintenance costs, either. Speaking to Realtor.com in 2018, remodeling expert Dan DiClerico of HomeAdvisor estimates that you'll spend about $1,200-to-$1,800 per year in annual upkeep.
Regarding getting a return on your investment by increasing your home's valuation, your mileage may vary. You'll get the most accurate projections by hiring an appraiser to compare your home – plus your theoretical swimming pool – to similar homes in the area. At most, you're looking at about a 7-percent increase in your home's overall value by adding an inground pool, according to Realtor.com and HouseLogic, so keep that figure in mind as you make your dream pool budget.
- HomeAdvisor: How Much Does It Cost to Install an Inground Pool?
- Blue Haven Pools: Swimming Pool Financing: 7 Sources for Your Pool Loan
- Realtor.com: Does a Pool Add Value to a Home? Diving Into the Pros and Cons
- River Pools: How Do I Finance an Inground Pool?
- Blue Haven: Estimate Your Monthly Payment for Swimming Pool Loans
- My Mortgage Insider: The Best Ways to Finance a Pool
- Popular Mechanics: "6 Steps to the Perfect Inground Pool"; Joseph Triuni; August 1, 2008
- United States Department of Housing and Urban Development: Fixing Up Your Home and How to Finance It
- State of California: Contractors State Licensing Board: Resources: "Before You Dive In: A Consumer's Guide to Pool Construction"
- The Florida Senate: 2011 Florida Statutes: Section 520.07: Requirements and Prohibitions as to Retail Installment Contracts
- North Carolina Housing Finance Agency: Home Ownership Mortgage Program: Section 3: Eligibility Guidelines
- Federal Trade Commission: Facts for Consumers: Home Equity Scams: Borrowers Beware!
- Federal Trade Commission: FTC Facts for Consumers:"Need a Loan? Think Twice About Using Your Home as Collateral"
Dan's decade-long experience as a freelance writer and small business owner has seen him contribute to financial publications including Chron.com, Zacks.com, MSN Money, Fortune, Motley Fool and others.