Second home mortgage: Is it possible to buy a vacation home using a bank loan?

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

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

Yes, it is possible to have two home loans.

Nothing prevents from having more than one housing credit at a time. As long as you have the financial capacity to take on the expenses, banks can approve a second loan for the purchase of a new home.

However, the risk analysis will be more demanding, as 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;

• Invest in a property for rent;  

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

• Buy a new house while keeping the current one.

What will the bank analyze?

When requesting a second credit, banks will evaluate carefully: 

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

• Your financial and professional stability.

• Credit history (no defaults);  

• The value of the property and the initial down payment;  

• The Loan-to-Value ratio (LTV) - generally, you will need to make a down payment of more than 10%-20%, 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 could be higher;  

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

• The required insurance 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 credit: How does it work?

Before proceeding with a second home loan, simulate several scenarios with different banks. To do so, 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 will take care of the entire process for you, at no cost. Contact them now at https://www.poupancanominuto.com/contacto and start today!