Vacation & Second Home Mortgages

Spend quality time in your vacation property.

An increasing number of Canadians are enjoying quality moments at their own vacation homes like never before. The dream of owning a cottage and creating lasting family memories is becoming a reality for many, thanks to attractive low interest rates and creative mortgage solutions that make these retreat properties accessible.

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YOUR GUIDE TO VACATION & SECOND HOME MORTGAGES

A vacation or second home mortgage is a loan specifically for purchasing a second property that will be used for personal enjoyment or as a holiday home, rather than as a primary residence or investment property. These mortgages may have different criteria and interest rates compared to primary residence mortgages due to the perceived higher risk.

Qualifying for a vacation home mortgage typically involves meeting stricter criteria than for a primary residence. Lenders may require a higher credit score, a lower debt-to-income ratio, a substantial down payment (often 20% or more), and proof of sufficient income to manage multiple properties.

Yes, interest rates for vacation or second home mortgages are often slightly higher than those for primary residences. This is due to lenders viewing these properties as carrying a higher risk of default, as borrowers are likely to prioritize their primary residence's mortgage in financial distress.

Many homeowners rent out their vacation homes when they're not using them. However, it's important to check with your lender as some mortgage agreements may have restrictions on renting the property. Additionally, rental income may help qualify for the mortgage by improving your debt-to-income ratio, but you'll need to disclose this intention during the application process.

Owning a vacation or second home has several tax implications. You may be able to deduct mortgage interest and property taxes similarly to your primary residence, depending on how you use the property. If you rent it out for part of the year, there are additional considerations for income and expenses. It's crucial to consult with a tax professional to understand the specifics based on your situation and how the property is used.