The number of Canadians investing in vacation properties is on the rise. Many people are realizing the benefits of owning a getaway home, including opportunities for relaxation, wealth-building, and creating memorable family moments. Thankfully, there are accessible mortgage options available for those interested in purchasing a vacation property, even if it is non-winterized or situated in a remote location.
One of the advantages of investing in a vacation property is the availability of low mortgage rates. Whether you are looking to buy a lake cottage or a housing option for your college-going child, there are various mortgage options to suit your needs. However, it is important to note that different lending criteria apply to second or third homes compared to primary residences. This means that the down payment requirements and treatment from lenders may vary.
In some cases, vacation and secondary homes may qualify for a minimum down payment of 5% or 10%. However, certain categories of vacation and secondary homes will require a higher down payment of 20% or more. These properties are categorized differently and receive different treatment from lenders. Furthermore, different types of cottages also have varying requirements, with some types requiring higher down payments and attracting higher mortgage rates.
The mortgage options available to you will depend on the type of property you are interested in. Properties classified as year-round accessible or seasonal will have different mortgage options. Additionally, there are options for incorporating down payments through mortgage refinancing, a Home Equity Line of Credit (HELOC), or a reverse mortgage.
Fortunately, in Canada, there are innovative tools available to streamline the mortgage processes and ensure accuracy. If you are looking for complete information and a quick mortgage pre-approval process, don't hesitate to reach out to professionals who can guide you through the process. With their expertise, you can find the best mortgage options for your vacation property investment.
