Buying a Vacation Home: What You Need to Know Before You Invest
Start with Your Long-Term Plan
Before falling in love with a vacation home listing, take time to reflect on your long-term goals. Ask yourself:
What does your 5- or 10-year plan look like?
Will you realistically use the property enough to justify the investment?
Do you have other major financial goals or obligations?
What’s the opportunity cost of owning a second property?
Clarifying your vision will help ensure your purchase aligns with your personal and financial priorities.
How Will You Finance Your Vacation Property?
Unless you’re planning to pay for the home in full, financing will be your next major consideration.
Down Payment Requirements
Expect to need a down payment of 5% to 20% or more. The exact amount depends on:
Whether the home is winterized or seasonal
The total purchase price
Mortgage insurance requirements
Affordability & Debt Ratios
Can you comfortably take on the added expense? Your income and current debt load will determine what you qualify for. Use the stress test in my mortgage app to run preliminary numbers, or reach out and I’ll do it for you.
Is the Property Mortgage-Eligible?
Some vacation homes, especially remote or off-grid properties, may not qualify for traditional mortgage financing. International properties may also pose financing challenges, requiring alternative or creative lending solutions.
Owner-Occupied or Investment Property?
How you plan to use the home will impact your mortgage options and tax obligations. Renting it out for short- or long-term periods? Living in it part-time? Each choice comes with its own set of considerations.
Choosing the Right Location
Where you buy is just as important as what you buy. Some key location-based questions to ask:
Is the area undergoing development that could impact property value?
Are municipal services (water, septic, emergency response) available?
What is access like during different seasons?
How easy is transportation to and from the property?
Is there strong long-term potential for property appreciation?
Who Will Manage the Property When You’re Away?
You won’t be at your vacation home all the time, so make a plan for how it will be maintained.
Will you rent it out on Airbnb or VRBO?
Do you need a property manager or cleaning crew?
What are the insurance requirements for unoccupied homes or rental properties?
Is there local support available for emergencies or repairs?
Proper planning ensures your property stays in good condition — and remains a safe, secure investment.
Let’s Make Your Vacation Home a Reality
Not sure where to start? That’s where I come in. As a licensed mortgage broker, I can:
Help calculate your debt servicing ratios
Determine your mortgage eligibility
Explore financing options like second mortgages or reverse mortgages
Offer guidance tailored to your goals
Whether you’re eyeing a lakeside cottage or a cozy chalet, I’ll help you explore your options and secure the financing that works best for you.
Let’s talk — your vacation home dream could be closer than you think.
Tim Ward, Collingwood Mortgage Broker.
