Make your dream of owning a cottage, vacation home, or second property a reality. Learn everything you need to know about financing your perfect getaway.
for qualified second home buyers
A vacation home or second property offers lifestyle benefits, investment potential, and the freedom to escape whenever you need it.
Escape to your own private sanctuary whenever you want - no booking fees, no availability issues, just your space.
Build equity while enjoying your property. Real estate historically appreciates, and vacation areas often see strong value growth.
Rent out your property when not in use to generate income that helps offset your mortgage and expenses.
Create lasting memories with family and friends in your own vacation home - a legacy to pass down generations.
If you rent your property, you may be able to deduct mortgage interest, property taxes, and maintenance expenses.
Buy now, use for vacations, and transition to full-time living when you retire - a smart long-term plan.
Understanding the difference is crucial for financing
A property you occupy for part of the year as a personal residence. Your primary use is personal enjoyment, not rental income.
As low as 10% (under $500K) or 15-20% (over $500K)
Lower rates - similar to primary residence mortgages (typically 0.10-0.25% higher)
Occasional short-term rentals allowed (e.g., Airbnb when not using it yourself)
A property purchased primarily to generate rental income or capital appreciation. You don't live there.
Minimum 20% required - no exceptions
Higher rates - typically 0.50-1.00% more than primary residence rates
Primary purpose is rental income. Can be rented long-term or short-term year-round.
Lenders classify your property based on your primary intent. If your main goal is rental income, it's an investment property regardless of how often you visit. Misrepresenting your intent is mortgage fraud and can result in serious consequences.
Rule of thumb: If you'll use the property personally for at least 14 days per year or 10% of the days it's rented (whichever is greater), it can qualify as a second home.
What you need to qualify for a second home mortgage
Down payment varies based on purchase price and lender requirements:
Under $500,000
Minimum 10% down payment
$500,000 - $999,999
15-20% down payment typically required
$1,000,000+
Minimum 20% down payment (no mortgage insurance available)
Second home mortgages typically require a stronger credit profile than primary residences:
You must prove you can afford BOTH your primary residence and second home:
Not all properties qualify as second homes:
Lenders want to see you have financial cushion:
Typically Required: 2-6 months of mortgage payments in savings after closing
This includes both your primary residence payment AND your second home payment combined.
You must currently own or be purchasing your primary residence to qualify for a second home mortgage. You cannot have two mortgages classified as "primary residences" at the same time.
Different ways to finance your vacation property
A standard mortgage specifically for vacation properties. Best for those who qualify for conventional financing.
Down Payment
10-20%
Rate Premium
+0.10-0.25%
Term Options
1-5 years
Tap into the equity in your primary home to purchase your vacation property. Good option if you have significant equity built up.
Pros:
Cons:
Refinance your primary home for more than you owe and use the cash difference for your vacation property down payment.
Best When
Rates are low
Ideal For
Large purchases
Rate Type
Fixed available
Short-term financing if you're selling your primary home and buying both a new primary residence and vacation property. Covers the gap between purchase and sale.
Timeline: Typically 30-90 days, with option to extend to 1 year. Higher interest rates but provides necessary liquidity.
Many buyers use a combination approach: put down 10-15% from savings, then tap home equity or refinance for the remaining amount. This preserves cash flow while securing the property. I can help you structure the optimal financing mix for your situation.
Discuss Your StrategyCommon questions about vacation and second home mortgages
Let's discuss your vacation home goals and get you pre-approved. I'll help you navigate the mortgage process and find the best financing solution for your second property.