Milestones
Buying a Second or Vacation Home
The dream of a place at the lake or the coast — and how the financing differs from a primary home.
A second home — a lake cabin, a beach condo, a place near the grandchildren — is one of life’s great rewards. Financing one is very doable, with a few differences from buying your primary residence.
What changes for a second home
- A larger down payment is typical — usually 10% or more — since a second home carries more risk than the one you live in.
- Slightly higher pricing than a primary-residence loan.
- Qualifying on both payments, since you will carry your primary mortgage and the second together.
- Occupancy rules — a true second home is for your use, which is priced differently from an investment property you rent out.
Second home or investment?
The line matters. A property you occupy part of the year is a second home; a property you buy mainly to rent is an investment, with its own loan programs and pricing — including DSCR loans that qualify on the rent. If you plan to rent the place when you are not there, tell us, because it shapes the right loan.
Pro tip
Tapping equity in your primary home — through a HELOC that leaves your low first-mortgage rate intact — is a common and efficient way to fund the down payment on a second home. Plan the two moves together.
Common questions
How much do I need down on a second home?
Usually at least 10%, and more can improve your terms. A second home needs more down than a primary residence because lenders see it as higher risk, though it is still far less than many buyers expect.
Can I rent out my second home?
Occasional rental may be allowed, but a property you buy mainly to rent is treated as an investment, with different loans and pricing. Tell us your real plans so we match the right program — renting changes the picture.