Owning a secondary home, vacation home, or cottage is a dream for many Canadians. Whether it’s for weekend getaways or as a future retirement home, these types of properties can offer a peaceful escape from the hustle and bustle of everyday life. However, purchasing and financing a secondary home, vacation home, or cottage can be more complicated than buying a primary residence.

At Gilko Capital, we understand the unique challenges of financing these types of properties and offer customized solutions to meet the needs of our clients. In this article, we will explore the financing options available for secondary homes, vacation homes, and cottages in Canada.

Mortgage Options for Secondary Homes, Vacation Homes, and Cottages

When it comes to financing a secondary home, vacation home, or cottage, there are a few options available. The most common is a mortgage, which can be either a conventional or high-ratio mortgage.

Conventional Mortgages:
A conventional mortgage requires a down payment of at least 20% of the property’s purchase price. These mortgages typically have lower interest rates and do not require mortgage insurance.

High-Ratio Mortgages:
A high-ratio mortgage allows you to purchase a property with a down payment of less than 20% of the purchase price. These mortgages typically have higher interest rates and require mortgage insurance.

Home Equity Line of Credit (HELOC)

A home equity line of credit (HELOC) is another financing option available for secondary homes, vacation homes and cottages. This type of loan allows you to borrow against the equity in your primary residence to finance the purchase of a secondary home, vacation home, or cottage.

To qualify for a HELOC, you must have a significant amount of equity in your primary residence, typically at least 20%. The interest rate for a HELOC is usually variable and is based on the prime rate.

Bridge Financing

Bridge financing is a short-term financing option that can be used to purchase a secondary home, vacation home, or cottage while waiting for the sale of another property to close. This type of financing can be useful if you want to take advantage of a buying opportunity but do not have the funds available to complete the purchase.

Bridge financing typically has higher interest rates than conventional mortgages and is only available for a short period, usually between 6 and 12 months.

Conclusion

Financing a secondary home, vacation home, or cottage in Canada can be challenging, but it doesn’t have to be. With the right financing options and guidance from a trusted mortgage broker like Gilko Capital, you can make your dream of owning a secondary home, vacation home, or cottage a reality.

Whether you’re interested in a conventional or high-ratio mortgage, a HELOC, or bridge financing, our team of experienced brokers can help you find the financing option that best meets your needs. Contact Gilko Capital today to learn more about our financing solutions for secondary homes, vacation homes and cottages in Canada.