Can you buy a vacation home with a second mortgage from the bank?

Second home loan: What are the conditions to finance the purchase of a second home?

Having a second home is the dream of many families - whether for vacations, to rent out, or as a long-term investment. But is it possible to apply for a second mortgage? And what do you need to know before moving forward?

Yes, it is possible to have two housing loans.

There is nothing preventing you from having more than one mortgage simultaneously. As long as you have the financial capacity to assume the costs, banks can approve a second loan for the purchase of a new home.

However, the risk analysis will be more demanding, since you already have a fixed monthly burden with the first credit.

In what situations does it make sense?

A second mortgage can be used for:

• Buy a holiday home  

• Investing in a property for rent;

• Acquire a property for a child, keeping the property in your name.

• Buy a new home while keeping the current one.

What will the bank analyze?

When applying for a second loan, the banks will carefully evaluate:

• Your effort rate: Sum of loan installments relative to monthly income. Ideally, it should be below 35%-40%;

• Your financial and professional stability.

• Credit history (without defaults);  

• The value of the property and the down payment;  

• The Loan-to-Value ratio (LTV) - generally, a down payment of more than 10%-20% is required, as it is a non-permanent residence.

Interest rates and conditions

The second credit will have different conditions from the first.

• Payment deadline can be shorter;  

• Spread may be higher;

• The financed amount tends to be lower (maximum 80% of the acquisition or appraisal value);

• The required insurances are the same, multi-risk and life insurance.

Having two houses can be an achievable goal - as long as it is planned responsibly.

Read also: Second home loan: How does it work?

Before proceeding with a second home loan, simulate various scenarios with different banks. To do this, credit intermediaries from Poupança no Minuto can help evaluate your financial capacity, collect proposals, and assist in choosing the most suitable one for you! They take care of the entire process for you, at no cost. Contact them and start today: Poupança no Minuto Contact