The number of Canadians investing in vacation properties is on the rise. Many individuals are realizing the benefits of owning a getaway home for various reasons such as relaxation, wealth-building, and creating cherished family memories. Fortunately, there are accessible mortgage options available with low rates specifically designed for vacation properties, including those that are non-winterized or located in remote areas.
Whether you're looking to invest in a cozy lake cottage or a housing option for your college-aged child, you can find the best mortgage to suit your needs. It's important to note that the lending criteria for second or third homes differ from those of primary residences. This means that the requirements for obtaining a mortgage for a vacation or secondary home may vary.
The down payment requirements for vacation and secondary homes can also differ depending on the category they fall into. While some properties may only require a minimum down payment of 5% or 10%, others may require a higher down payment of 20% or more. The specific categorization of the property will determine the treatment it receives from lenders.
Moreover, the type of cottage you are interested in may impact the down payment and interest rates you are eligible for. Different types of cottages have different requirements, meaning that some may require a higher down payment and may be subject to higher interest rates.
When it comes to mortgage options, it's essential to consider the property type, whether it is categorized as year-round accessible or seasonal. This will play a role in determining the kind of mortgage you can obtain.
If you are considering purchasing a vacation property and require assistance with the down payment, there are options available such as mortgage refinancing, using a home equity line of credit (HELOC), or even a reverse mortgage.
Fortunately, in Canada, there are innovative tools and resources available to streamline the mortgage application process and ensure accuracy. If you have any inquiries or would like complete information, it is recommended to reach out to professionals who can guide you through the process and provide a quick mortgage pre-approval.