How Much Down Payment Do You Need for a Vacation Home?

Learn about the down payment requirements for buying a vacation home. Generally, you'll need at least 10% down payment for a vacation home, but some lenders may require up to 20% or even 35%.

How Much Down Payment Do You Need for a Vacation Home?

Buying a vacation home is a great way to enjoy the summer holidays and have a place to escape to all year round. But before you start looking for your dream getaway, it's important to understand the down payment requirements for a vacation home. Generally, you'll need at least 10% down payment for a vacation home, but some lenders may require up to 20% or even 35%. When it comes to buying a primary residence, you can usually get away with as little as 3% down payment.

But for a vacation home, lenders will want to see a minimum of 10%. This is because lenders view second mortgages as higher risk and they want to make sure that you have enough cash reserves on hand to cover the loan. In addition to the down payment, lenders may also require a higher credit score and interest rate for vacation home loans. They may also require that you have 3-5 months of cash reserves available.

If you plan on renting out your vacation home while you're not using it, make sure that it doesn't violate your loan terms. When considering whether or not to buy a vacation home, it's important to factor in additional costs such as property taxes, homeowners insurance, and any partnership fees of homeowners. You may also need to hire someone to look after your property while you're away. Overall, if you can qualify for your purchase without the property generating any income, buy it as a vacation home.

But be prepared to make a larger down payment and meet stricter guidelines than you would have for a primary residence.

Shawna Fluellen
Shawna Fluellen

Total zombie expert. Professional pop culture practitioner. Incurable coffee guru. Award-winning food guru. Award-winning sushi fanatic.