The housing market in spring 2020 was negatively impacted with the COVID-19 lockdown.  Since August, some of the restriction has loosening and we saw a bounced back to a spring like housing market.

During the pandemic, travel has been limited, and people have been forced to cancel their vacation.  As the cities started to loosen up, there has been upsurge in interest for vacation home properties.  Home buyers were searching for a domestic escape.  In addition, the work style has also been changing.  A portion of the work force were forced to work from home. Many employers are now giving their employees the option to work from home permanently that has prompted home buyers to reassess their living conditions.  The idea of having a home as a place to work and relax has become more appealing.

While the idea of owing a vacation home is appealing, it will take a greater amount of time and planning. If you start now, you could be taking advantage of the summer weather in your vacation home. Here are some factors to consider when you are looking at financing a vacation home:

  1. Is it a second home, rental, and primary residence?  Your down payment will be different depending on the usage of the property.  For example, if the property is used as primary residence, the down payment can be as low as 5% as long as the property value does not exceed $1M.For rental properties down payment can be anywhere between 20-35%.
  2. If the property is in a remote area, you may be required to have either higher down payment and/or higher rates.  Some lenders will only lend up a capped amount (i.e. $600,000), independent of location of the vacation home.
  3. Year-round access, also known as 4-season property, on public road is required.
  4. The zoning of the property must be residential.   It is important that you confirm the zoning because agricultural properties require a different set of approval guidelines and lenders.
  5. If the property has well and septic, you should make sure that the seller provides you with the well and septic certification.  Properties with well and septic tanks may require a higher down payment.

“For those that currently have a property, you also have the opportunity to leverage your current home to either make up any shortfall or finance it completely”, states Joe Digiambattista, EVP pololoans.

It is difficult to get mortgage on the following type of properties

  • Homes on privately leased land
  • Native land
  • Time shares, fractional interests, and life leases
  • Rental pools, hotel-condos, Airbnb-style and rooming houses
  • Heritage homes.

“Looking for a vacation home can be very exciting”, say Ming Wong of pololoans.  “However, you should speak to a mortgage specialist before to ensure that you can get the financing that you need”.

Stay safe!


Ming Wong
Mortgage Broker
License #: M11000309
C: 647.229.8990
Joe Digiambattista
Principal Broker
License #: M08001230
C: 416.624.3643