Second Properties
Finance the retreat you've been planning. The rules are different from your primary residence, and getting the classification right matters.
How Lenders See It
A true second home, a property you intend to occupy personally for a significant portion of the year and not rent out, can qualify for similar financing to your primary residence. In some cases, as little as 5% down if the property meets insurability requirements.
The moment a property is used as a rental, even occasionally, most lenders reclassify it as an investment property. That means 20% down, no default insurance, and rental income rules for qualification.
Lenders also consider property type, year-round accessibility, and whether the property would function as a primary residence for the borrower. Recreational properties on lakes, in ski areas, or on acreage have their own set of lender requirements.
Owner-occupied, no rental income. Subject to insurer approval on property type. Same qualification framework as your primary residence.
If you plan to rent the property at all, most lenders require 20% down and treat it as an investment property.
Cottages, cabins, and acreage properties may require larger down payments. Lender options are narrower, which is where a broker's network matters.
Intended Use
Best financing terms. Treat it like a second primary residence. Some insurers allow 5% down on qualifying properties, giving you the lowest rate and most lender options.
A grey area. Some lenders allow a small amount of rental income from a second home. Others reclassify immediately. Structuring this correctly, and honestly, avoids problems at renewal.
Treated as a rental property. Requires 20% down, and rental income is counted toward qualification. The right lender selection can still produce competitive rates.
Get Started
Not sure if this applies to your situation? One call usually gives you a clear answer.
