Whether it's a Cape Cod beach house, a Vermont ski cabin, or a place closer to family — financing your second home is more accessible than you might think.
Min. Down Payment
10%
Min. Credit Score
620
Interest Rates
Slightly Higher Than Primary
Rental Restrictions
Limited Rental Allowed
Reserve Requirements
2-6 Months
Loan Types
Conventional & Jumbo
A second home mortgage is a loan used to purchase a property that you intend to occupy for part of the year in addition to your primary residence. This could be a vacation home at the shore, a cabin in the mountains, a condo in a city you visit frequently, or a home near family members you see regularly.
From a lending perspective, second homes are treated differently from both primary residences and investment properties. You'll get better rates than an investment property loan because lenders view owner-occupied properties as lower risk, but rates will be slightly higher than your primary home mortgage since you already carry one mortgage payment.
The key requirement is genuine personal use. Lenders need to see that this will be your home — not a pure rental property. You can rent it out part of the time in many cases, but it must be a place you personally live in for a meaningful portion of the year. If full-time rental income is your goal, an investment property loan is the right path.
Why buying a second home can be a smart financial and lifestyle move
Finance a home at the beach, in the mountains, or near family. Second home mortgages make your getaway property an achievable goal, not just a dream.
Real estate has historically appreciated over time. A second home lets you build equity in an additional property while enjoying it personally.
Some second home loan programs allow limited short-term rentals, letting you offset your mortgage costs when you're not using the property.
Mortgage interest on a second home is generally tax-deductible, just like your primary residence. Property taxes may also be deductible within IRS limits.
What you need to qualify for a second home mortgage
What to expect when financing a second home
A second home mortgage is ideal for these buyers
Common questions about buying a second home
The key distinction is occupancy and intent. A second home is a property you personally use for part of the year — a vacation home, a seasonal retreat, or a place near family. An investment property is purchased primarily to generate rental income or for appreciation. This matters because lenders offer better rates and lower down payments for second homes compared to investment properties, but the property must genuinely serve as your personal-use home.
In most cases, yes — but with restrictions. Lenders typically allow limited short-term rentals (such as renting a vacation home on Airbnb or VRBO when you're not using it), but the property cannot function as a full-time rental. You must personally occupy the home for a meaningful portion of the year. If your primary goal is rental income, you'll need to pursue an investment property loan instead.
You can generally deduct mortgage interest on your second home, just as you do on your primary residence, subject to the $750,000 combined mortgage debt limit under current tax law. Property taxes are also deductible, though total state and local tax (SALT) deductions are capped at $10,000. If you rent the property for 14 days or fewer per year, that rental income is tax-free. Longer rental periods trigger more complex tax rules — consult a tax advisor for your specific situation.
Second home mortgage rates are typically 0.25% to 0.75% higher than rates for a primary residence with the same credit profile and down payment. The exact premium depends on your credit score, loan-to-value ratio, and the loan amount. Despite the premium, second home rates are still significantly better than investment property rates, which can be 0.5% to 1.5% higher than primary residence rates.
The minimum down payment for a second home is typically 10% with a conventional loan, though some lenders may require 15-20% depending on your credit profile and the loan amount. For jumbo loans on higher-value properties, 20% down is standard. A larger down payment can help you secure a better interest rate and avoid certain loan-level pricing adjustments that increase your cost.
Let's explore your options and find the right financing for your vacation home, getaway property, or future retirement spot.