This second home mortgage guide will show you what's possible and how to take the next step towards purchasing your second home, whether you want to buy a summer cottage, a winter chalet, or simply a property for your child or an elderly family member.
How to Buy a Second Property in Ontario
Buying a second property or vacation home in Ontario is similar to the process of buying your primary residence.
We’ll start by pre-approving you and developing a mortgage strategy for you so you can begin looking for your second property with confidence.
If you’re looking to buy your next principal residence read this article instead.
We know the requirements of all the lenders, and will provide you with expert advice.
Second Home Mortgage Rules Canada
Based on the details of the property, some lenders are better suited for certain situations than others. Considerations include:
- Property to be used by family member vs. for recreational use
- Year-round access vs seasonal
- Water, septic system, electrical, and heating details
Depending on your goals and the property you’re interested in, we’ll find the perfect lender for you and your chosen second property.
Minimum Down Payment for Second Home Canada
In Canada, you can buy a Vacation/Second home with as little as 5% down when the purchase price is under $500,000.
When the purchase price is above $500,000 the minimum down payment is 5% on the first $500,000, and 10% on the amount above $500,000.
If the purchase price is above $1,000,000 you must put at least 20% down.
When you put less than 20% down the mortgage will be insured with Sagen or Canada Guaranty. The insurance premium is added to the mortgage and is approximately 4% of the mortgage amount.
Using Equity to Buy a Second Home in Canada
Typically the easiest way to buy a second home or vacation property is to use the equity in your current principal residence for the down payment.
When we develop your second home mortgage strategy we’ll explore the option of refinancing your principal residence as a way of accessing that equity. We can also consider using a second mortgage or home equity line of credit (HELOC).
Get a Lower Rate With Dominion Lending Centres
Getting a lower rate can make a real difference in your ability to afford an additional home or vacation property. We check with accredited lenders, then pass along our volume discount to you, ensuring you get the lowest rate possible.
Plus, you receive unbiased advice from an experienced mortgage broker who is passionate about serving you.