Thinking about a quiet cottage by the lake or a cozy cabin to escape the city? A vacation or secondary home can be a rewarding investment—and a great way to enjoy more of what Canada has to offer. But financing one isn’t always the same as buying your primary residence.
Here’s what to know about getting a mortgage for a second home in Canada, including eligibility, down payment rules, and how a broker can help you find the right fit.
What Counts as a Secondary or Vacation Home?
In Canada, a secondary home is any property you plan to occupy part-time but not rent out full-time. This can include:
- A cottage or cabin
- A ski chalet or lakefront home
- A condo or townhouse in another city (for work or family visits)
- A property purchased for a child attending university
To qualify for vacation or second-home financing, the property must typically be:
- For personal use, not income-generating
- Occupied seasonally or part-time by you or your immediate family
- Winterized and accessible (at least for mortgage-insured options)
How Is a Vacation Home Mortgage Different?
Vacation and secondary home mortgages fall into two broad categories:
🔹 Type A Properties (Fully Accessible Year-Round)
These are standard properties with:
- Permanent foundation
- Year-round road access
- Heat, electricity, potable water, and a kitchen
✅ Can often qualify for insured mortgages with as little as 5–10% down
✅ Rates and terms are similar to owner-occupied homes
🔹 Type B Properties (Seasonal or Limited Access)
These include rustic cabins or remote cottages that:
- May not have year-round access
- Lack some utilities or infrastructure
⚠️ Typically require 20%+ down payment
⚠️ May not qualify for mortgage insurance (CMHC or Sagen)
⚠️ Fewer lenders may be willing to finance them
Can I Use Rental Income to Qualify?
If you’re planning to rent out the property part-time, such as on Airbnb or VRBO, some lenders may allow a portion of that projected income to count toward your mortgage approval—but it’s not guaranteed.
If you plan to rent full-time, the home may be treated as an investment property, which comes with different rules and higher down payment requirements.
Always be honest about your intended use—mortgage fraud isn’t worth the risk.
What Are the Down Payment and Cost Expectations?
Here’s a rough breakdown:
| Property Type | Minimum Down Payment | Typical Term Options |
|---|---|---|
| Type A | 5%–10% | Fixed or variable |
| Type B | 20%+ | Limited lender options |
Other costs to plan for:
- Property taxes and insurance
- Utilities and seasonal maintenance
- Potential strata or association fees (for condos or private roads)
- Travel costs if it’s far from your main home
Should You Use Equity from Your Primary Home?
A popular strategy is to use a Home Equity Line of Credit (HELOC) or refinance your current home to access equity for the down payment.
This can be a smart move—especially if you have strong equity and want to avoid higher mortgage rates or CMHC insurance premiums.
You can run the numbers using our tools:
The Local Broker Can Help You Find the Right Fit
Financing a second home isn’t always straightforward. Whether you’re eyeing a cozy cottage in Muskoka or a quiet condo in Collingwood, we’ll help you:
- Explore your down payment and lending options
- Compare insured vs uninsured mortgages
- Understand the real monthly costs
- Avoid common financing pitfalls
We work with banks, credit unions, and alternative lenders to help you make a smart, stress-free decision.
Let’s Turn That Getaway Dream Into a Plan
Owning a second home doesn’t have to feel out of reach. Whether you’re just running the numbers or ready to buy, we’ll help you explore what’s possible.
Ready to apply or refinance? Start your application here:
👉 https://thelocalbroker.ca/local-broker-mortgage-application/
